Here’s where your credit card debt goes after you die

When someone dies, their debt doesn’t just go away, but it also doesn’t automatically go to their loved ones, either.

There’s quite a process -- called probate -- that deals with debt after death, according to U.S. News.

Instead of going directly to your loved ones to pay, your debt -- including your credit card debt -- will be paid using your assets, such as your car, your home and your bank accounts, the outlet reported.

Essentially, a probate court will assess your financial situation after you die and an executor will deal with your estate and what happens to it, U.S. News wrote.

There are, however, several circumstances that would send your credit card debt directly to a loved one, including a shared credit card or loan, a shared property or business.

There are also nine states that are “community property states,” including California, Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, according to the outlet.

Unfortunately, dealing with debt after death isn’t rare, either. According to the outlet, three out of four consumers die in debt.

According to data from the New York Federal Reserve, U.S. household debt rose to $13.86 trillion in the second quarter, marking the 20th quarter in a row where debt balances increased.

Three out of four consumers die in debt, U.S. News reports.

In the second quarter, debt increased by $192 billion – up 1.4 percent – and it’s now higher than the previous peak before the financial crisis.

The proportion of credit card debt balances that are considered seriously past due also rose. Payments on 5.2 percent of credit balances were 90 days past due – up 5 percent from the quarter prior.


FOX Business’ Brittany De Lea contributed to this report.