Is the executor responsible for paying off credit card debt?
An executor will not be held personally responsible for paying off a deceased credit card debt or other debt. However, an executor can be held responsible for mistakes made while settling an estate.
If you follow the procedures laid out by your state’s probate court, you shouldn’t have a problem.
The executor is required to make an inventory of the deceased assets (the car) and debts (the car loan, the credit card balance, mortgage, etc). Any assets must first be used to pay creditors for outstanding debt, with the order determined by state law. If a car loan is worth less than the car, for example, the car typically would be sold, the car loan paid off and any remaining equity used first to pay the costs of settling the estate and funeral expenses. If there’s money left over, it would be used to pay as much as possible of the credit card balance (assuming there are no other debts that would take priority, such as federal or state tax debt).
If there isn’t any money left to pay creditors, on the other hand, you simply inform them of that fact and they have to write off the balance as bad debt. As an executor, you aren’t personally responsible for paying the deceased debts, unless you cosigned on a loan or are a joint account holder on a credit card.
Where you might run into trouble is if you ignore your state’s laws, sell the car and pocket the difference or distribute it to other heirs. You also run into trouble by paying one creditor ahead of another in violation of state law. Because you can be held personally responsible for mistakes made in settling the estate, it would be smart to get an attorney’s help.
For more information on what happens to debt after a person dies, read Debt After Death: Credit Card, Mortgage and Student Loan Debt.
About The Author
In his 40-plus-year newspaper career, George Morris has written about just about everything -- Super Bowls, evangelists, World War II veterans and ordinary people with extraordinary tales. His work has received multiple honors from the Society of Professional Journalists, the Louisiana-Mississippi Associated Press and the Louisiana Press Association. He avoids debt when he can and pays it off quickly when he can't, and he's only too happy to suggest how you might do the same.