Dealing with Credit Card Debt when Your Husband or Wife Dies

If your spouse dies your credit card debt will be the farthest thing from your mind. Unfortunately though, your credit lender will not be aware of your personal tragedy, so the bills will keep coming, and within weeks or even days, payments will be due. Even in ordinary cimrcumstances dealing with debt is stressful. Grief however, can make the task seem insurmountable. Breaking the problem into smaller steps will make it easier to tackle.

Make a list of all credit card accounts held by you or your spouse. List each card balance, interest rate and minimum monthly payment. Also note whether the account is in your name or your spouse's.

If your spouse owns a business, determine if any of your spouse's credit cards are held under the business name. Often, your spouse's personal estate is not responsible for these liabilities. Check with an attorney who is familiar with your spouse's business affairs.

Decide which personal card accounts you need to keep. Even if you do not regularly make credit purchases, keep at least one card active to use for emergencies. Choose a card with the lowest annual interest rate and least risk of rate increase.

Communicate your circumstances to your credit card company as soon as you possibly can. This shows that you are sincere in your desire to repay legitimate debts. Upon learning of your loss, some credit card companies will offer you special options that make repayment easy. And others will offer only disingenuous consoling words while trying to get money from you as quickly as possible. The reason for the latter tact is that statistically, your change in circumstances means that the longer they wait for repayment, the less chance there is that they'll get their money, ever. Understanding this now will give you a little fortitude when you're dealing with hard nosed credit card representatives later.

For any accounts on which you are the main card holder, cancel your spouse's cards. Explain that your spouse is deceased and that your financial situation has changed. Then ask if they can offer a lower interest rate.

For credit cards that are in your spouse's name, you may have a greater advantage in seeking a lower interest rate. This is because when a creditor recognizes a risk of not ever being repaid, they are anxious for a firm repayment commitment, sometimes even if they must offer a super low interest rate.

Call the credit card company. Explain that the card holder is deceased and you want to close the account. Then explain that your financial situation will make repaying the debt difficult. Offer some general information regarding your financial difficulties. For instance, tell the representative if you are elderly, in poor health, unemployed, have ten young children or anything else that shows you in a sympathetic light. You'll be asked to provide the date of your spouse's death, but are not required to offer any information regarding the cause of death or if your spouse had been ill a long time. Do not relay any information regarding life insurance settlements or other compensation that may be coming your way; on the other hand, if you are sure there will be none, feel free to say so.

The response you receive will depend entirely upon which credit card company you are dealing with. Some card companies will immediately offer you a rate as low as 1% for a five year term. You will be required to keep your payments current and you will be unable to make any more charges on the account. Provided you are actually liable for the debt, this is a good deal.

At least one high profile credit card company takes an alternative approach, trying to intimidate borrowers or bereaved spouses into agreeing to repay at a high interest rate. You'll know you are dealing with such an organization when the representative asserts him or herself authoritatively with a title such as Mr. or Mrs. The motivation behind this tactic is the same-they want to get their money back. But your response should be different.

When you find yourself up against this tact, it's better to communicate in writing. Through written communication like faxes or emails, you regain the power to sate exactly what you want without risk of being strong armed into accepting terms or making commitments that are not to your advantage. Expect the telephone representative to be reluctant to give you a fax number or email address. When this happens, insist that you can communicate only in writing due to health reasons. Considering that the loss of a spouse causes extreme emotional distress, this is legitimate.

Whether you're dealing on the phone or in writing, under no circumstances should you agree to assume responsibility for you spouse's account at a high interest rate, or to repay the debt immediately. When your cash assets are dwindling rapidly, as is often the case when ones spouse passes on, credit cards are a low priority obligation. Before settling on any repayment plan, find out what the lowest available interest rates are. Also be sure that you are in fact liable for the your spouse's debt. If the debt is large, consider getting legal advice before agreeing to repay.

Don't be intimidated by threats to pursue payment from your spouse's estate. Almost invariably options exist that the credit lender has yet to offer. After all, it's much less expensive for the credit card company to work with borrower than to sue an estate. However, despite the take charge attitude, the first person you speak with on the phone has no authority to negotiate with you, so ask to speak with a supervisor. You may have to do a bit of verbal battle, preferably in writing, to gain access to the loftier decision makers. However, persistence and refusal to agree to other terms will eventually open doors.