Will I Inherit Credit Card Debt?
Credit card debt inheritance depends on several factors. First, your state of residence is important, since state law dictates liability for a debt. The type of loan is also a factor. If you and your loved one shared a joint account, or if you were a cosigner on an account, you would be liable for the debt. A person who is assigned a debt as a result of a court order is required to pay the debt despite the death of the original debtor. In the case of a divorce, if you were assigned debt, you would be still be required to pay the debt even if your former spouse dies.
Some states – those with community property laws – hold surviving spouses accountable for the credit card debt of a deceased spouse. In common law states, the person with the debt obligation is the one who owes the debt. In that case, you would not be held liable for a deceased spouse’s debt. Make sure to contact an attorney for questions regarding your obligation for debts.
Should I Co-Sign a Loan?
Sometimes parents or grandparents wish to offer financial assistance to a child or grandchild. However, it is important that you talk with an attorney and tax advisor before you agree to co-sign or lend money to relatives, since you will be expected to make the payments if your loved one gets behind on payments or defaults on the loan. Remember, you should never loan money you may need for unexpected costs, such as for car or home repairs, hospital bills, or medication.
How Can I keep My Information Safe?
Never give out personal information over the phone. This includes your name, date of birth, social security number, health card number, PIN number, computer passwords, or credit card information. There are many scams that may sound real, but remember this: organizations such as the IRS, your bank, or your credit card carrier will never call you and ask for account numbers or personal information.
Even if you do owe money for taxes, the IRS will never call you and ask you to buy gift cards for repayment of your taxes, or threaten you with jail time for failure to wire them money.