Can credit card companies go after a person's children or spouse to collect if the cardholder dies?

[weiford]

My father-in-law has huge credit card debt (US$60,000). It's crazy. But anyway I am most worried if something happens to him, will the card companies be able to go after my wife (his daughter) or his wife (my mother-in-law) for debt collection? I am taking him to debt counselling soon but he's just a crazy spender (obviously). I need to protect my wife's and her family from her father's mistakes. What happens if he claims bankruptcy? Can they go after us as well? Please advise.

[darik2]

If the debt is in just his name, it will be just his responsibility (or that of his estate when he dies) to pay the debt. Before his heirs can inherit anything from his estate, the assets would have to be used to pay his debts.

However, anything he owns jointly will pass to the other join owner. That means if he and his wife both own the vehicle, it will not be taken to pay the credit card debt. Now if the car is not paid off, she'll have to finish paying for it to keep it.

The life insurance might or might not be taken to pay his debts. If the insurance proceeds are left to someone, such as his wife or children, when he dies, they aren't obligated to use it to pay the debt. If the money goes into his estate, if there is no named beneficiary, then the insurance proceeds must be used to pay the debts before the money goes to anyone.

He's only 60 years old, and could probably live another 20 years or so. He definitely needs credit counseling or to consider bankruptcy.

His wife and everyone else needs to NOT ever co-sign a loan with him.

[abisha]

Get something called Umbrealla policy from your car insurance company or home insurance company. This will protect you if you get sued by anything - a mere $140 a year.

And no, your family is not reposonbile - they may still try though.
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[naseem]

Depends if he dies and leaves them any money or not.

If not, they cannot go after them, unless they can prove that they are somehow holding assets belonging to the deceased.

[giulio]

I don't think they will go after any of his family members, on less he has them signed on as a Co-Signer, but It's not possible I believe.

[erwin]

No, they can't come after his daughter....but if he dies, then his creditors would get first shot at whatever (if any) assets he leaves behind. If he qualifies to file for Chapter 7, then he needs to file for Chapter 7 bankruptcy. He would have to meet certain income requirements. A BK attorney can tell him if he qualifies to file.

I don't think that non profit credit counseling would be of much help...In general, they can get the interest rate reduced to just under 10% and total payments down to around 2% of the total balance, so that would be around $1,200 per month in this case. If he can afford these terms, then maybe he should consider this...otherwise, bankruptcy is probably the best route. If he files, then his family members will need to vigorously monitor his spending habits.....because once he files for Chapter 7, he can't file again for 8 more years.

While an accredited credit counseling program like Consumer Credit Counseling Services (CCCS) can be good, you need to be aware that these programs are funded/supported by the credit card industry and this can create an obvious conflict of interest in the advise they give you. CCCS counselors will often advise people to not file for bankruptcy when they really should.