Where do credit card companies fit in the probate process?

Answer 1

Credit card companies are general creditors of the estate. They get paid after the funeral expenses, administration expenses, secured debts and other prioritized debts. They must be paid before beneficiaries get any money. That does not mean they have to be paid in full or that interest after date of death has to be paid. They may try to charge that interest but the executor or administrator should just refuse to pay it and tell the company "Sue me". They won't. You can also negotiate the debt down from the actual date of death amount. In fact this should always be tried. Those debts are almost always negotiable. If you tell them they can either have, say 70% now as payment in full, or file the usual formal claim paperwork (they hate that) and wait for the usual six month period before their claims are even considered(they hate that worse) they will compromise. A credit card company facing the possiblillty of preparing formal paperwork, then waiting about 6 months before the executor even thinks about it, only to have the executor dispute the claim and tell the company to sue the estate will usually settle. Also demand a detailed history of the account. Many credit card companies are happy to get a reasonable amount back and be done with it. That's because they can take the amount they did not get as a tax write-off. Also, if the do sue, their lawyers will take part of it anyway. None of this is improper. This is just making the company abide by standard state laws governing claims against an estate but offering them a way to avod all that fuss.