How To Settle Consumer Credit Debt and What Happens To It When You Die?

If you have Consumer credit debt, with a few steps you may be able to negotiate with the companies on your own.

The first thing to do if you are having trouble paying your consumer credit debt is to contact your lender. If you have lost your job or some other reason cannot pay your bills contact the company before you miss your first payment. The lender may be more willing to work with you if you contact them.

Can I Negotiate Consumer Credit Debt?

Ask to have your interest rate lowered or try to negotiate a payment schedule. Your lender may offer to settle, or forgive a portion of the debt if you are 90 days or more delinquent on your account. It is unlikely that all or most of the debt will be wiped away, but if you can get some of it forgiven it may make a difference. However, if you do settle some of your debt, it may be reported to the credit bureaus as a settlement which could hurt your credit score for years to come. But if the settlement is reported as “paid in full” it may not have an impact on your credit score. If the portion of the forgiven debt is over $600 you will need to pay income taxes on that amount.

Can You Be Sued For Consumer Credit Debt?

Yes you can be sued for Consumer credit debt. The statute of limitations varies by state from 3 years up to 15 years. If you owe more than a $1,000 and have not made contact about making payments, your chances of being sued are greater. The larger the amount you owe, in most cases you are more likely to be sued for the amount. The statute of limitations is determined the state that you lived in at the time of the debt, not the state that you live in currently.

What Happens To Consumer Credit Debt When You Die?

A number of factors determine what happens to your consumer credit debt when you die. If the credit card was yours alone, with no joint account holders then the debt is yours alone. Your estate is responsible for paying off the balance. If the estate goes through probate, then your administrator will look at your assets and debts and from guidance from the law will determine in what order bills should be paid. Remaining assets will be distributed to the heirs.

If the assets don’t cover the bills, the creditors are notified that the estate is insolvent and the bills will be written off. A credit card company can’t legally force someone else to pay.

If you share the account as a joint account holder then you could be liable for the balance on the card. If you are merely an authorized used then you would not be responsible for payment.

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