• SmartMoney

Am I Responsible for My Wife’s Credit Card Debt?

Question: In the August issue of SmartMoney Magazine, you mention a question I need an answer for: “Are you responsible for the (tax) debt incurred by your spouse?” Also, my wife has a lot of credit card debt in her name. Am I responsible for paying that off when she dies?

Peter in Nixa, Mo.

Answer: Your letter is timely. Just last week the Federal Trade Commission released a policy statement noting that debts incurred during life can be collected against the debtor’s “estate” after death. But what’s included in a spouse’s estate depends on where you live. In Missouri, where you are, only what’s in your wife’s name alone – not things that are owned by you, or the two of you together – is considered fair game for creditors.

So in the case of your wife’s credit cards, as long as you’re not a co-signer, those contracts are between her and the credit card companies, and do not involve you. You, or the executor of your wife’s estate, would need to notify the credit card companies and attach a copy of the death certificate. And get the number of a good lawyer, just in case: Experts say there have been cases where banks and collections agencies have attempted to collect credit card debt from the surviving spouse, regardless.

The issue of tax debt is slightly more complicated. If, for example, your wife has unpaid income taxes when she dies, you are only responsible for those taxes if there was a joint tax return filed, says Angel Foley, a bankruptcy attorney in St Louis, Mo. In that case the Internal Revenue Service will say both parties are “jointly and severally” responsible. Put bluntly: you would both responsible for paying that tax bill in full.

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