bouncing that last check

Rockhound · #1 03-21-2007, 04:52 PM

In the thread on leaving stuff to the kids, the notion of spending every last cent came up.

I've heard that if you die with credit card balances, that they can't collect from the estate. Is that true. If so, should I pursue these strategies:

When aging parents die, use their cards to buy everything I can online before I report the deaths.

Make sure Mrs RH and I have separate cards, so we can take advantage of this ourselves

Get aging parents to load up on credit cards--accept every offer out there.

Kenshiro · #2 03-21-2007, 04:54 PM

Why wouldn't they be able to collect from the estate?

Rockhound · #3 03-21-2007, 04:55 PM

Quote:

Originally Posted by Kenshiro

Why wouldn't they be able to collect from the estate?

Just a rumor I heard. Though if you bounce your last check, there's not much of an estate.

MG · #4 03-21-2007, 05:05 PM

I don't think that rumor is entirely true. It depends on whether there is any money left in the estate. If so, the executor has an obligation to contact the creditors and pay off debts (using estate money) as feasible.

Of course, if there's no money in the estate, then I suppose the credit card companies are SOL. However, I'm going to speculate that if what you suggested (running up high balances that have to be charged off on death) starts happening on a large scale, the credit card companies will start lobbying for some sort of legislation that allows them to force liquidation of the estate (i.e. sell the house) to recoup their money, even though it was technically unsecured debt to begin with. Just my armageddon prediction.

http://seattlepi.nwsource.com/money/...gletary09.html

Quote:

Financial fact: Do your debts die with you? Sorry to say, but no. Many companies may choose to forgive the debt, but others may try to collect from a deceased person's estate. The trustee of an estate is required to contact creditors and pay debts before distributing any money or property to any heirs. Creditors can lay claim to any assets, even if you haven't named a trustee. Of course, for many people there isn't any money to satisfy debts, making the issue moot.
The good news is that you can't really inherit someone else's debt (unless you took on that obligation somehow -- by co-signing a loan for example -- before the person died). So if one of your parents dies owing lots of money that the estate can't cover, creditors can't go after you.

Judge Dredd · #5 03-21-2007, 05:55 PM

even if it is true, if the CC company could ever prove you charged on the card after their death, they'd probably try to haul you into court for fraud.

If you don't charge a lot, they'd never care, likely. So there's the rub. Charge a lot, higher risk. Charge a little, prob not worth it IMHO.