Recently on our Texas bankruptcy forum a user asked, “If my husband recently died and left $20,000 of credit card debt am I legally responsible for paying the debt or does it get discharged at the time of his death?”
Community property states and the obligation to pay the debts of a deceased husband
State laws vary so it’s important to understand the laws of the state in which you live. For example, you mentioned you and your deceased husband lived in the state of Texas. Texas, along with Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington, Wisconsin, and Alaska (in certain circumstances), are community property states.
Under community property laws, if your deceased husband acquired debts during your marriage the debts will survive your husband’s death and you will be responsible for repaying the debts, regardless of whether or not your name was physically on the credit card or you made or knew about the purchases.
Laws in community property states, however, vary greatly from laws in other states. For example, if you lived in the state of Massachusetts all of your deceased husband’s assets and property would be part of his estate and would be probated, which means the executor of the estate could sell your deceased husband’s assets to pay his debts prior to disbursing any remaining assets.
Although this means you may not receive any disbursement if the debts are greater than the assets, you also are not responsible for any remaining debts following your deceased husband’s death.
What can a creditor do to collect credit card debt from my deceased husband?
If you live in a community property state you are responsible for your spouse’s credit card debts. This means creditors will have the legal right to contact you following his death and take certain actions to collect the debts, including credit card debt.
If you refuse to make payments and the debt is substantial, at some point the creditor is likely to go to court and seek a judgment against you. If they prove their case or you fail to respond, the court will issue a judgment, which is a legal verdict that you owe the money.
After the judgment is issued, in the state of Texas it is generally enforceable for a period of ten (10) years, allowing the creditor to place a lien on certain real property or a levy against certain assets.
The good news is in the state of Texas credit card companies will not have the legal right to garnish your personal wages (although this is not true for all creditors).
What are my options for dealing with my husband’s debts?
If you have the money or can arrange a payment plan with the credit card company, that is generally the best course of action.
If, however, you do not have the money to pay them, you have few assets, and you are living on Social Security or retirement income, the best option may be to do nothing.
Although they may take you to court and get a judgment, if you have no cash, no property, and no equity in your home, they will not be able to garnish your Social Security income and they will simply be unable to collect the money.
Filing bankruptcy and eliminating credit card debt from your deceased husband
Another more drastic action which would only be necessary if your deceased husband owed a substantial amount on credits cards would be to file bankruptcy. Debts such as credit card debts, medical bills, and personal loans may be eliminated through Chapter 7 bankruptcy.
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