Does an estate have to pay a credit card if it doesn’t have the money?

UPDATED: Sep 30, 2022

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Does an estate have to pay a credit card if it doesn’t have the money?

My mom passed and left a $17,000 balance on her credit card. The house is on a reverse mortgage deal and she owns a van that books for $1,200. We also recieved $8,400 back off the life insurance that we used to cover her burial expenses. We were the beneficiaries. What legally, can I say to these people to keep them from calling me every day?

Asked on March 31, 2017 under Estate Planning, Kentucky


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Whatever assests your mother had are now a part of her estate and must be used to retire any of her outstanding debt. That having been said, to the extent that there are fewer assests than liabilities (i.e. if the estate runs out of money to pay bills, fees, etc.), the decedent's children and other benefciiaries are not responsible for paying off the rest of the debt. In such a case, the estate will instead be declared insolvent and the remaining debts will go unpaid. They will extinquish as a matter of law. As for the insurance proceeds, such proceeds pass outside of probate and are therefore not assets of the estate. The lsisted beneficiaries are entitled to the proceeds.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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