What happens to credit card debt when you die?

How to deal with a deceased person's card debt if you are an Authorised Estate Representative

The Authorised Estate Representative is allowed to handle the deceased estate's dealings, including unpaid credit card debts. Often this person is named in the deceased's will.

If you haven't been named in the will and you are the next of kin you may have to apply to the court for a letter of administration (more on this in the next section).

You can also engage a solicitor to act on the estate's behalf when dealing with unpaid debts or other parts of the estate.

Step 1. Let the bank or lender know

Financial institutions usually have deceased estate and bereavement specialists that will help you get someone's accounts in order. Below, we've included contact details for the Big Four banks.

Step 2. Confirm your authority to represent the estate

You will need to prove that you are the Authorise Estate Representative. The bank will ask for documents to prove this or a letter from the estate solicitor.

Step 3. Give the bank relevant documents and details

The bank or lender will ask you for a death certificate or other details of the deceased. Usually, you will need to fill in a “deceased estate notification form”. The information you'll need to provide for this form includes:

• Details about you. Your name, relationship to the deceased, address and contact information.
• Details about the deceased. Their name, address, date and place of birth.
• If there is a will. A copy of the will and the death certificate.

Step 4. Request release of funds and close accounts

The financial institution will review its accounts for the deceased's estate. This includes any credit card balances, other debts and savings account balances.

The bank should be able to freeze the credit card account. The bank can provide you a list of regular payments taken from the deceased's bank account, debit card or credit card.

If there are funds available in the accounts, you can request the bank pays off the card balance using these funds.

What do you know about funeral insurance?

Credit card debt can be paid from a mix of sources that are linked to the deceased’s estate, not just savings. Most superannuation accounts, for example, offer some form of life insurance that could cover the cost of debts that need to be paid when the account holder dies.

What if my loved one died without a will?

If you're the next of kin for the deceased but there's no will, then no one is named the Authorised Estate Representative. In this case you could apply to your state supreme court for a Letter of Administration.

This process varies by state but you'll need the original death certificate. If approved, the court will grant you the right to administer the estate and handle their debts and other affairs.

What legal aid numbers can I call for help?

Free, independent legal advice is available through government-run and not-for-profit legal associations. Consider these organisations if you're looking for legal help to deal with a deceased estate. Your bank may also be able to assist.

Who else can I contact for help?

• The Australian Centre for Grief and Bereavement
• The Births, Deaths and Marriages Registry
• Australian Funeral Directors Association
• Beyond Blue
• Lifeline

What if I have a joint credit card with a loved one who died?

If you have a joint credit card account then you will retain total control over the account. And you'll have to pay off the balance as normal.

You can still notify the bank if you wish to remove your late partner's name from the account.

Find out how life insurance can help your family cover your debts if you pass away

What happens if the deceased estate doesn't have enough money to pay off the credit card?

Any debts must be paid from the estate before any beneficiaries receive any benefits. This means children or partners may not inherit any money if the debts are greater than the assets.

If the estate doesn't have enough money, after taking into account all the deceased person's assets including superannuation and any life insurance payouts, the estate is insolvent.

Entering bankruptcy

The estate could apply for bankruptcy. If the remaining credit card debt (or other debts) exceed $5,000 it is possible for the creditors to bankrupt the estate by applying to the court.

It may also be possible to negotiate the unpaid card debt with the bank, or even get the debt waived. In these circumstances it's a really good idea to seek legal advice.

Can I inherit a loved one's credit card debt?

If the credit card debt is from a joint credit card account you shared with the deceased, you're liable to pay the debt. It's your card.

But if you're not a joint cardholder, and there are not enough assets in the estate to pay off the credit card debt, the debt does not pass to you. But you also won't inherit any assets.

Written by

Amy Bradney-George

Editor

Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald. See full bio

Amy's expertise

Amy has written 565 Finder guides across topics including:

• Credit cards
• Frequent flyer
• Credit score
• BNPL
• Money management
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Co-written by

Richard Whitten

Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

Richard's expertise

Richard has written 562 Finder guides across topics including:

• Home loans
• Property
• Personal finance
• Money-saving tips