Should an Authorized User Assume a Debt?
Should an authorized user assume a debt if the primary holder passed away?
I have a close friend that was an authorized signer on her fathers credit card account. He passed away 14 years ago. She and her mother notified all creditors of his passing. The creditors did not close the account and my friend thought it was due to an outstanding balance. Over the years she received renewal cards and the account was reported to all the credit bureaus. In 14 years she never missed a payment and continued using the card because she thought the account was in her name. The credit cards came in her name. Recently she was notified the credit card co had closed the account due to the fact they had found in Public records that the father had passed away. They claimed in a phone call that she was not responsible and that it should not have even been reported to the credit bureau. But now they want her to apply for a new credit card and assume the responsibility of the debt. I told her not to sign up for any credit card and not to assume the debt. What does she do?
It is up to her to decide whether to assume the debt. My concern with the situation is that she used the credit card after her father passed away, and continued to make payments. It would be unethical for her to have used the card, accrue a balance and not take responsibility for some of the debt. However, the bank told her that she is not responsible for the debt. Now the bank wants her to assume the debt so they do not take a loss on the entire balance. She may want to consider finding a compromise. Instead of assuming the entire debt, she may want to consider assuming the amount she is responsible for.
With regards to the credit report reporting accounts on the credit reports of authorized users is allowed by Federal law, despite the fact that authorized users are not legally liable for the debts. Many credit card companies report the card payment histories on the credit reports of both the primary cardholder and any authorized users.
She may also want to speak with a licensed attorney in her state to discuss what the best option for her may be.
I hope this information helps you Find. Learn & Save.