What happens to credit card debt after death?

Information verified correct on October 25th, 2016

If a relative or spouse passes away, it’s important to know who’s responsible for their credit card debt after death.

When you’re dealing with the death of a loved one, how you’ll handle their debt is probably one of the last things on your mind. Unfortunately, the reality in Australia is that the spouse or children will most likely become responsible for that debt. If you’ve found yourself in this situation, use this guide to find out how it works, who needs to pay and what the process is when dealing with credit card debt after death.

Who is responsible for credit card debt after death?

If you’re wondering what happens to credit card debt after the death of a spouse or family member in Australia, the answer is that it depends on the circumstances.

One of the first questions to ask is was the credit card in your relative’s name only or in both your names? If it’s a joint account, you’re equally liable to pay the outstanding balance. If the credit card debt is only in the name of your deceased spouse, the liability will be paid out of the deceased’s estate. If there’s not enough money, the creditor is likely to offer you a payment plan or write the debt off. With so many variables, we have outlined what happens to credit card debt after death and the steps you can take to deal with it.

Secured and unsecured debt

The management of debts for a deceased estate varies based on which of the following debt categories it falls into:

  • Unsecured debt. Credit card debt is a prime example of unsecured debt because a credit card is not tied to an asset (such as your car or home). With this type of debt, lenders have limited recourse to claim your assets if unsecured debt is left unpaid. These factors are partly why interest rates and fees can be so high for unsecured products.
  • Secured debt. A mortgage is an example of secured debt that is tied to an asset, such as a house. If you default on your home loan repayments, the lender is within their rights to reclaim possession of the house to recoup the cost of the loan.

How to deal with finances if a spouse or relative passes away

Below are some simple steps you can take to deal with a deceased family member’s finances.

We’ve also listed contact numbers for legal aid representatives in each state in the frequently asked questions section of this article. Refer to these contacts if you want to seek free, independent legal advice.

Step 1: Notify your bank

Financial institutions have deceased estate and bereavement specialists you can call to help you work through a difficult process.

Bank Bereavement / Deceased Estate Number
ANZ1800 237 170
Westpac1300 130 240
Commonwealth Bank1800 686 153
NAB1300 911 451

Step 2: Give required documents to your bank

You may be asked to provide details of the deceased, as well as your personal information so that the bank or financial institution can provide appropriate assistance based on your individual circumstances. The financial institution may also want to see a certified copy of the death certificate and will. Document requirements vary depending on whether or not you can provide it.

Your financial institution may ask you to complete a “deceased estate notification form”. The information you’ll need to provide for this form include:

  • About you. Name, relationship to the deceased, address and contact information.
  • About the deceased. Name, address, date and place of birth.
  • If there is a will: A copy of the will and the death certificate.
  • If there is no will: Something to prove you’re the next of kin such as a letter of administration.

A bank branch manager may be able to assist with on the spot certification of original documents if you take them to a branch.

Step 3: Bank’s assessment

Here, the financial institution will review the deceased’s estate. They will look at current debts and assets, including outstanding credit card debts and savings account balances. If there are outstanding debts, the bank will make an attempt to reconcile the debt with available assets from other accounts. This includes accounts held by the deceased outside of the bank’s network, such as their superannuation funds.

Step 4: Release of funds

If there are sufficient funds to cover the deceased’s credit card debt, the bank will pay the liability first and release any leftover funds to the beneficiaries. If the deceased’s assets are less than the amount owing, the financial institution may contact you to arrange a payment plan. This usually involves a freeze on the interest rate so that interest charges stop compounding. In some circumstances, the bank may write off the debt.

What do you know about funeral insurance?

Credit card debt can be paid from a range of sources linked to the deceased’s estate. Most superannuation accounts, for example, offer some form of life insurance that may offer a benefit that covers debts leftover when the account holder passes away.

How to deal with credit card debt after the death of a spouse


George and May lived in Sydney. George suddenly passed away. He left everything to May in his will, including a $10,000 credit card debt. The home was in both their names, and when he died, ownership of the property automatically passed to May. This meant the family home was excluded from George’s will and exempt from any claim by creditors (even though the bank can not claim an asset like the family home to cover an unsecured debt).

George also had a superannuation fund balance of about $800,000. He was a member of a MySuper fund, which included insurance with a death benefit. George’s solicitor handled the settling of George’s estate and the $10,000 credit card debt was paid to the bank from his superannuation death benefit. The remaining balance of his assets went to May.

There are plenty of options available to help you deal with credit card debt after the death of a spouse or relative. If you’re unsure which strategy is the most appropriate, contact your bank or legal aid to discuss your options.

Do you have insurance to cover you if you die? Compare life insurance policies.

Frequently asked questions

What legal aid numbers can I call for help?

Free, independent legal advice is available in your state through various government run and not-for-profit legal associations. Consider these organisations if you’re looking for legal help to deal with a deceased estate. Your bank may also be able to assist.

StateLegal help
South Australia
West Australia
Northern Territory

Who else can I call for help?

What if there isn’t a will?

If the deceased has not left a will, you will need to apply for a letter of administration or probate to prove you’re the next of kin and eligible to administer the deceased’s estate.

What about joint bank accounts?

If you have a bank account in a joint name, ownership of the account will be transferred to your name once the financial institution received notification about the deceased.

How do I get the probate grant?

Apply for the grant of probate through the Supreme Court. You must have this document if you’re dealing with estates greater than $50,000 in value.

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Sally McMullen

Sally McMullen is a journalist at finder.com.au who is a credit cards and travel money expert by day and music maven by night.

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34 Responses to What happens to credit card debt after death?

  1. Default Gravatar
    Christine | May 26, 2016

    Hi there,

    My Dads de facto recently passed away quite suddenly and has left behind 15k in credit card debt . They were both pensioners and there is no money left in her estate, the only asset she owned was half of the house they bought together, her will states that the home becomes my fathers until his death.

    My father doesn’t have the funds to pay the credit cards and is now worried the credit card companies will force him to sell the only asset which is his home, can you tell me if this is a likely scenario.


    • Staff
      May | May 31, 2016

      Hi Christine,

      Thanks for your inquiry and I’m sorry to hear about your family’s lost.

      If your father happens to be a joint account holder or co-signatory, he will become solely responsible for the debt and should shoulder the monthly repayments. If not, what he needs to do is to immediately contact the credit card company to inform them about his spouse’s death and ask that any interests be frozen so that the debt doesn’t continue to increase.

      Although there is no absolute assurance, in case that the debt is greater than the assets left behind, sometimes, the credit card issuer will be forced to write off the debt as a loss. But before they do that, they will still do everything they can that the debt should be paid off. So it’s best that you help your father contact the card company and see what would be their advice and his options as well. He can also prepare a copy of her death certificate if the credit card company would need it.

      I hope this could help.


  2. Default Gravatar
    | January 26, 2016

    Is it normal procedure for a Bank/Credit Union to demand a copy of a deceased persons Will as proof to the identity of the Executor? They say unless they see it they won’t release the bank account funds.

    • Staff
      Jonathan | January 27, 2016

      Hi Lynne, thanks for your inquiry.

      To ensure that the executor is legitimate and the rightful party to receive the funds it can be normal protocol for the banks to require this documentation.

      I hope this helps.



  3. Default Gravatar
    Lynne | December 29, 2015

    My partner has recently passed on leaving an unsecured credit card debt of $17k. I have been told I will probably have to sell the house to pay for this debt. Is this correct

    • Staff
      Sharon | December 29, 2015

      Hi Lynne, thanks for your inquiry!

      Since a credit card is an unsecured debt it will not be the responsibility of any loved ones, unless the credit card is under a joint account. If the card is a joint-account, as soon as one of the account holders dies the remaining account holder will automatically become solely responsible for the debt. If the deceased’s estate is sold and their are not enough funds to pay unsecured creditors, the debt can go unpaid. The deceased’s family can not be held liable for these debts.

      I hope this helps.


    • Default Gravatar
      Lynne | December 29, 2015

      Hi Sharon, does this mean I have to sell the house which we purchased to-gether even though I am not a signatory on the card?

    • Staff
      Sharon | December 29, 2015

      Hi Lynne, thanks for your response.

      If the card is only under your husband’s name, then you will not be responsible for paying off the credit card debt.



  4. Default Gravatar
    Kellie | November 9, 2015

    My father has a credit card that is in the name of a now registered company and he is a pensioner. Who is responsible for this debt?

    • Staff
      Jonathan | November 10, 2015

      Hi Kellie, thanks for your inquiry!

      If the credit card was registered under the company’s name then the company will be held responsible for the debt. The liable party will be the account owner of the card/ primary cardholder.



  5. Default Gravatar
    Sally | February 27, 2015

    My hubby has a credit card from ANZ ,what happens if he dies ? We have no big assets and we both pensioners ….Can you tell me how we can pay off the credit card faster ? Thanks

    • Staff
      Jonathan | March 2, 2015

      Hi Sally, thanks for your inquiry!

      Since a credit card is an unsecured debt it will not be the responsibility of any loved ones, unless the credit card is under a joint account. For more information on deceased credit card holders please see this page.



  6. Default Gravatar
    sharyn | February 5, 2015

    My mother has a credit card what happens to the balance when she dies do I have to pay it

    • Staff
      Jonathan | February 5, 2015

      Hi Sharyn,

      Thanks for your inquiry!

      Please see this page for a guide on what happens to credit cards after death.

      I hope this helps.



  7. Default Gravatar
    Krishnan | January 22, 2015

    My niece an Australian citizen and Indian origin lady in mid thirties with two kids of 7 and 9 years lost her husband a couple of months ago. At the time of his death he had a saving of around 2000 dollars in bank account and a credit card due of almost 18000 dollars. As estate he has only a car worth around 4000 dollars. Other than those only household items like sofa, fridge, washing machines and utensils are his assets. My niece got insurance from the superannuation fund based on a Letter of Administration of Supreme Court and the fund is now lying in a NAB Account on her name. What is the extent of liability of his wife and children towards the credit card dues? I understand that Insurance funds are protected from credit card dues. Is the Solicitor acting as an administrator take possession of the car and sell it without the consent of my niece. ?Kindly advise. Krishnan

    • Staff
      Jonathan | January 28, 2015

      Hi Krishnan,

      Thanks for your inquiry.

      Credit cards are an unsecured form of credit, the card issuer shouldn’t chase a family member over a loved one’s credit card debt. There are some cases where those left behind will be liable for your credit card debt, and those cases are where you have had a joint account or co-signatory. Where your account has been joint, as soon as one of the account holders dies the remaining account holder will automatically become solely responsible for the debt. If the deceased’s estate is sold and their are not enough funds to pay unsecured creditors, the debt can go unpaid. The deceased’s family can not be held liable for these debts.

      I hope this helps.



    • Default Gravatar
      Krishnan | January 28, 2015

      Hi Jonathan,
      Thanks for the inputs on credit card recovery of the deceased and the extent of liability of the spouse this being an unsecured liability. Another fundamental question is, can the only asset of the deceased i.e an old car being used by is wife and her two young girls be taken away by the credit card company as a part f recovery of dues. She works in an office and has two daughters aged 7 and 12 years studying in two different schools, where this is their only mode of conveyance. Kindly clarify.

    • Staff
      Jonathan | February 3, 2015

      Hi Krishnan, thanks for your inquiry.

      Unless the debt has been secured against any assets, loved ones will not be held accountable for the debt. Please see this page for a guide on credit card debts after death.

      I hope this helps.



  8. Default Gravatar
    Josh | January 14, 2015


    My father died with debts on two credit cards. One with about $3000 owing on it and another with $13500 owing on it.

    After paying out funeral costs he has 3800 left over which will not cover all his debts.

    Do both banks just write this off? Or will the $3000 credit card need to be paid out first and the second written off?


    • Staff
      Jonathan | January 14, 2015

      Hi Josh,

      I am sorry to hear about your loss, thank you for your question.

      It is important to note that the credit card company should be contacted immediately and informed that a family member is deceased. Certain credit issuers allow interest free payment options for a specified period if an eligible person takes over the account. The Credit Card terms and conditions of each credit issuer will give guidance for managing deceased accounts with a contact number for further inquiry.

      In cases where the debt is greater than any assets left behind sometimes, the credit card company will be forced to write off the debt as a loss.
      There are some cases where those left behind will be liable for the credit card debt, and those cases are where there is a joint account or co-signatory. Where the account has been joint, as soon as one of the account holders dies the remaining account holder will automatically become solely responsible for the debt.

      I hope this has helped!



  9. Default Gravatar
    rick | January 2, 2015

    Hi my brothers wife has just passed , and she has left him with a credit card debt of more than $7000.00 , my brother has no assets , nor any money in the bank , he lives in a housing trust , and lives on a pension , is he responsible for the debt thank you

    • Staff
      Elizabeth | January 5, 2015

      Hi Rick,

      Thanks for your question.

      If his wife was the primary account-holder, any assets or property she directly owned (her estate) may be liable to pay off the debt. Your brother may want to seek legal advice to find out his responsibilities regarding this debt, and what, if any of it, he has to repay. There’s a free legal hotline for NSW that can be reached on 1300 888 529. If you’re from another state, you can search ‘legal aid (your state)’ to find the relevant number to call.

      I hope this will help.



  10. Default Gravatar
    Glen | December 11, 2014

    My brother died with 4k cash in a bank account and 11k c.c. debt and nothing else. now a funeral bill of 7k….does the executor get first go at the cash to pay funeral costs and then the cc provider would have to write off the debt provided the circumstances are exactly as stated.

    • Staff
      Elizabeth | December 11, 2014

      Hi Glen,

      Thanks for your question.

      The role of the executor is to decide how to distribute the funds, but usually the cash would be used to pay off any outstanding debts first. Property and other assets can also be sold to cover these debts. If you have further questions you may want to direct them to the executor of the estate as they will be distributing the funds.

      I hope this has helped.



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