Tomorrow marks the 2 year anniversary of the passing of my Dad. He has been on my mind a lot lately. I was thinking back to the things I helped my mom with when he passed, and there it was another item about debt and credit cards. My Mom and Dad has a few credit cards with some balances when he passed. The accounts were all in my Dad's name. I was put in charge of calling them all, letting them know of his death and seeing what could be down with the outstanding balances. To my surprise all but one of the companies were looking for payments. Since everything was left to my Mom, it was now her responsibility to pay this debt. My Dad had life insurance, and they has a sizable saving account so there was money to cover these. I spoke with each account and had to provide proof of his death (a copy of his death certificate) I spoke with each to see if there was anything that could be do to reduce the balance. Most companies, if the account could be settled right away would offer a reduction in the overall debt. Similar to the way debt reduction programs work today, the key to these programs is you can play let's make a deal, but you need to have the cash to settle. I was able to settle all accounts for less then what was owed. All but one of the accounts had to be closed because the had been open in my Dad's name. I now had to sit down with Mom and explain everything. That she need to, if she chose to establish he own credit by opening her own account. I also asked her why they were carrying this debt when the had money in savings? I explained the interest rates to her. So here I was giving her a financial lesson.
The keys here are:
If you carry debt and pass away the estate inherits the debt, it's not wiped clean. It will vary by situation, so check the laws within your state.
If you have the available fund to pay these unsecured debt off, do it. Don't find yourself paying interest when you don't need to.
I miss my Dad.