Inheriting credit card and mortgage debt

Most expect to inherit big chunk of their parent’s assets. But what if your parents are broke and in debt at the time of their death? Who is going to inherit their credit card and mortgage debt?

Depending of the type of debt, different rules may apply. Husband and wife having credit cards together, may result in surviving spouse inheriting the debt after the death of the other spouse. In some states debt may be community property and as a result any debt accumulated after marriage shared by each spouse. This type of debt is not the responsibility of children after the death of their parents.

If a mortgage is held by husband and wife, the surviving spouse carry the burden of paying mortgage after the death of the other spouse. When both parents who hold the mortgage dies, whatever party that is going to inherit the property may be able to continue the mortgage depending on the provisions of the mortgage loan. Some may think that the loan balance is due in full at the time of the death of owners, but the Consumer Financial Protection Bureau regulations kicks in to provide some protection for the party especially children inheriting the property as well as the mortgage.