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Do you have to pay off parents’ credit card debt after death?

Regardless of what a collector claims on the phone, you are not legally responsible to pay a credit card bill in most cases. A collections agent may cite “moral obligation” to exploit your desire to do the right thing, but you cannot let a debt collector play on your emotions.

When a loved one leaves debts, they do not disappear. They become the responsibility of the estate. If the estate does not have assets to pay all the bills, some may remain unpaid.

More debt in later years

Several years ago, a National Bureau of Economic Research study found that almost half of seniors die with less than $10,000 in assets. The tolerance for carrying debt has changed for older Americans in recent decades as well.

Nearly a quarter of retirees over the age of 75 have mortgages. And about one-third of those 65 and older carry credit card debt. The average is $6,300.

Sorting out finances takes time

Few parents openly discuss finances with their children. If their situation was dire and required juggling bills after an illness or unexpected expense, it can be hard to unwind what was happening.

To sort out debts, start with an Excel document or some other system that allows you to keep track of outstanding bills. As you deal with a collections agency, utility or lender, take detailed notes. It can take a number of calls and diligent follow-up to resolve a bill.

Because each situation is unique, it is valuable to get advice from a lawyer, especially if you have been named personal representative. Colorado law will affect distribution of limited funds, and mistakes could expose you to personal liability. Plus, it is important to note that an inheritance from a pay-on-death account (examples include life insurance or retirement plans) does not necessarily need to be applied to pay estate debts.

Question what a collector says. Recognize that these individuals play on emotions and may be trying to reach you while you are vulnerable after a loss. If you feel pressured, end the call and resolve the bill later.

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