If you die with bad credit..........

[TheFied]

So my FIL passed away recently. Very shocking, died suddenly of a massive heart attack.

We are helping my wife's mom go through all the details. As it turns out, back in 1998 her dad co-signed for a credit card for her sister. Her sister has since run this credit card above the credit limit (incurring fees) and has been late on payments the past couple of months. Her sister told us this last week which is why we ran the credit check. And yep, it's on his record.

Her dad had perfect credit, no late payments, house paid off, cars paid off.... and his credit score over the past year likely took a ~200 point hit.

We ran her mom's credit score on expirian (I think that is what it was called, my mortgage broker recommended the link). Her score was almost 200 points higher than her husband's. All b/c of the co-signed credit card. Her mom wasn't on the co-sign; her dad was.

So a couple of questions:

1) With her husband passing away, does the co-signed credit card get passed to her mom?

2) Does his credit hits get passed to her mom?

Thanks!

 

[hollisdude]

That's an interesting twist.

My first thought is that the Mom was not the co-signer and therefore is not liable for the debt.

Then again, I thought debts were reciprocal between husband and wife.

I'm betting that the credit card company is going to pursue any and every one to try and get money from somebody. Tell your MIL to get ready for the phone calls.

 

[ChiroHorn]

1) No, unless it was a joint account (which it wasn't).
2) No, but they might go after his estate for the balance owed.

 

[TheFied]

Sadly, my FIL had perfect credit. Equiran had her credit at over 860 (out of 990) and the only difference between her credit and her husband's was that she wasn't on the co-signed credit card.

Another thing that sucks is this credit card was created in 1998 when my wife's sister was in college. My FIL didn't even know that it was still open or that his daughter wasn't current on it.

The amount on the credit card is ~$5000 which is not cheap but with her life insurance policy that she has coming, my MIL can pay that off easily. The cars are paid off, the house is paid off and he has a pension that he had full survivorship benefits with (he was a teacher for 35 years). So she is in great shape.

That said, my wife's sisters credit is **** and if the credit card doesn't get passed over to my mother-in-law we won't mind it.

But the main thing is we don't want my MIL credit to become ****** like my FIL's had (without him even knowing).

 

[NCAAFBALLROX]

When my 1st wife passed away in '97, I made the mistake of paying off ($ 7K +) her Visa account that she had opened many years before we even met...

 

[HenryGandorf]

without knowing too much of how it works, i can see the debt carrying over to her before any credit dents. she should ask an accountant friend what the move is, but she should probably pay it all off within the next few months, to remove the debt. i would assume her credit will stay the same.

 

[si se puede]

Someone who does wills/probate stuff would know better than I, but I believe the creditor's claim for the debt will be against the estate and not your MIL. If the creditor puts in a claim for the debt, the executor will pay it out of the estate before it is passed onto her.

Short answer: No, it will not ding her credit.