Expert: Regan Shinski - 4/15/2010

Question
My Parents had me a designated "Authorized User" on their credit card, they have both passed (8yr-5yrs ago respectively) I was their caretaker and there is mixed debt on the card. I have used and have made monthly payments (never late) myself for the past 5 years.  My Parents had income and assets that I do not, and a high limit  (23K) that I never would have qualified for (and didn't qualify for being only "authorized" in 1979) Now I am no longer employed and I can no longer afford the min payments much less have any hope in paying it off in it's current form. I thought I would send the bank their death certificates and tell them I have no income and live off my Fiancees retirement and need to have the interest/debt/monthly payments lowered or can not pay. What do you suggest?  Something needs to change with this account to make it affordable but how?  Who establishes the terms now as I have never directly been involved in a contractual agreement and up till now have been able to monthly pay it.  A quick response would be greatly appreciated!

Answer
Hi Christina:

You need to send them the death certificates and close the account.  That really should have been done five years ago.  Normally the debt would have gone to the estate and been basically written off under your parents name if the estate did not have assets to pay it.  Now, with your continued use and and knowledge of this situation, you may have legally extended the liability to yourself.  There is a small chance you may have even committed a crime of fraud.  It depends on your circumstances surrounding your use of the card and knowledge after their deaths.  The credit card company had an agreement with your parents, not you.  By you keeping the card, using it, and keeping such obviously important information from the creditor, they may try to extend liability to you.  Certainly they may go after you for purchases made after their deaths.  This can be done because you obviously knew the legal card holders had no way to make payments and you continued to charge on the account anyway.  At worst, it can be deemed a crime causing you to pay restitution and any other ramifications of the criminal justice system.  At best, they let it go or deem it not worthwhile to pursue (very possible.)  In the middle, they can try to assign civil liability to you since you obviously knew the card holders could not make payments and you continued to charge on the account.

All of this will depend on how aggressive their legal and collection departments are and how big the debt is (if it is worth it to them to pursue you.)

However, you continue to compound the situation by keeping the cards and account open.

Good luck, I wish I had better news for you and hope it works out.

Regan