How to Handle Credit and Debt After the Death of a Spouse

Do I Need to Notify Credit Bureaus of My Spouse's Death?

When your spouse dies, you'll need to notify lenders that accounts held in your spouse's name alone should be closed. If you have joint accounts, notify lenders that one party on the account is now deceased. Lenders will report your spouse as deceased when they send their next account update to the credit bureaus.

Credit bureaus also receive periodic lists of newly deceased people from the Social Security Administration (SSA). Funeral homes generally notify the SSA of a death; if you want the funeral home to handle this for you, give them your spouse's Social Security number. You can also report the death to the SSA yourself by calling 800-772-1213 or visiting your nearest Social Security office in person.

When a credit bureau receives notice of the death, your spouse's credit report will be flagged to indicate that he or she is deceased. If anyone attempts to apply for credit in your spouse's name, lenders will be alerted that they've passed away.

If you'd like to speed up the notification process and help ensure your spouse's identity is secure, you can notify the credit reporting agencies yourself. You only have to notify one of the major consumer credit bureaus—Experian, TransUnion or Equifax—and they will tell the others. Here's how to notify each credit reporting agency of a death:

• Experian: Mail a copy of the death certificate to Experian's Consumer Assistance Center, P.O. Box 4500, Allen, TX 7501, or upload it online.
• TransUnion: Mail a copy of the death certificate to TransUnion, P.O. Box 2000, Chester, PA 19016
• Equifax: Mail a copy of the death certificate to Equifax Information Services LLC, P.O. Box 105139, Atlanta, GA 30348-5139

Along with the death certificate, you'll need to provide the credit bureau with your spouse's legal name, Social Security number, date of birth and date of death. They'll also want your name, mailing address, and a copy of your driver's license or other government-issued identification. If someone else, such as the executor of your spouse's estate, is notifying the credit bureau, that person should provide a copy of their government-issued identification and a copy of the will, executor agreement or power of attorney documentation proving they are authorized to act on behalf of your spouse's estate.

What Happens to Joint Accounts After a Spouse Dies?

Creditors cannot legally close a joint account or modify its terms just because one of the account holders has died. However, creditors typically ask you to reapply for credit in your own name. Based on this application, they will decide whether to continue extending credit or adjust your credit limit.

Sometimes, lenders will mistakenly report both spouses on a joint account as deceased. If this happens, you'll need to determine which creditor made the error and contact them to correct it.

If you live in a community property state, any credit accounts your spouse opened while you were married are automatically joint accounts, meaning you're responsible for these debts. Your spouse may have had credit accounts you weren't aware of or have forgotten about, so be sure to keep an eye on all incoming bills and pay them on time to avoid credit damage.

Paying jointly held accounts on time is critical to maintaining your good credit. Making even one late payment can negatively affect your credit score and make it harder for you to get loans or credit cards in your own name in the future.

Am I Responsible for My Deceased Spouse's Debt?

When your spouse dies, their debt survives, but that doesn't necessarily mean you're responsible for paying it. The debt of a deceased person is paid from their estate, which is simply the sum of all the assets they owned at death. If your spouse had a will, the executor they named in the will uses the estate to pay off creditors. If your spouse didn't have a will, a probate court judge will decide how to distribute their estate and will choose an administrator to carry out those decisions.

In general, you are not responsible for your spouse's debts unless you held a joint credit account (which is different from being an authorized user on your spouse's account); cosigned for a loan, debt or account; or live in one of the nine community property states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (Alaska residents have the option to choose community property by signing a special agreement.)

Community property states generally hold spouses responsible for one another's debts. However, laws differ from one community property state to another. If you're not sure what the law requires, consult an attorney familiar with estate law in your state.

If you signed or cosigned hospital admission papers or medical treatment authorizations, you may also be responsible for any medical bills your spouse incurred that their insurance doesn't pay. This depends on your state's laws and the specific documents you signed.

If your spouse's assets at the time of their death don't cover their debts, will you be forced to hand over the proceeds of their life insurance policy or tap their retirement account to pay the bills? Thankfully, certain assets—including life insurance policies, retirement plans, brokerage accounts and any assets held in a living trust—are protected from creditors and can't be pursued to pay debts after a spouse's death. Otherwise, the estate executor or probate administrator will refer to your state's probate laws to prioritize creditors and distribute payments accordingly until the money runs out. If there's not enough money to pay all the debts, some creditors will not get paid.

Where to Look for Help

After the death of a spouse, you may be a target of creditors seeking repayment for your spouse's debts. While it's legal for creditors to contact you for information about your spouse's debt, such as how to contact the estate executor, they cannot request payment for debts that aren't your responsibility. Debt collectors must follow federal, state and local laws, including the Fair Debt Collection Practices Act, when pursuing a debt. If you are being harassed by creditors, you can send a cease and desist letter, submit a complaint to the Consumer Financial Protection Bureau or your state's attorney general, or contact an attorney for help.

Have you discovered your spouse had credit card debt or other debt you never knew about? Are you having trouble paying the bills on your own? Perhaps your spouse always handled the finances and you're feeling overwhelmed. A credit counselor can help you learn to handle your finances, make a budget and develop a debt management plan.

Credit counseling agencies are usually nonprofit organizations; you can find them through the National Foundation for Credit Counseling, Financial Counseling Association of America or the U.S. Department of Justice's list of approved credit counseling agencies.

Watch out for "credit repair" organizations that promise to wipe out your debt, recommend doing anything dishonest or charge a hefty fee. Legitimate credit counselors provide free or low-cost services and teach clients financial literacy, not just how to get out of debt.

Maintain Your Credit for the Future

Now that you're on your own, being able to get credit cards and loans can be key to your financial security. Help protect your future by reviewing your credit reports. You can get them for free from all three major consumer credit bureaus through AnnualCreditReport.com. Your free credit report and score are also available for free directly through Experian. While you're at it, set up free credit monitoring to stay on top of any changes to your credit score and get alerts of suspicious activity. It's a great way to help maintain your own credit as you move into a new phase of your life.