Can you be held accountable for someone else's debt? | finder.com
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Can you be responsible for someone else’s credit card debt?

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Before you agree to become a guarantor or open a joint credit card, make sure you know these facts.

Though most people don’t realize it, you can sometimes be forced to pay credit card debt belonging to someone else. Such occurrences are rare, but it’s possible to take on liability for someone else’s debt without realizing it — or knowing the potential consequences down the line.

When are you accountable for someone else’s debt?

There are three main situations in which you can be held responsible for debt someone else racked up:

  • When you act as a guarantor. If someone doesn’t qualify for a credit card independently, they can ask someone to act as a guarantor. As the guarantor, you’re required to sign an agreement that legally allows the bank to transfer all debt to you should the cardholder fail to make repayments.
  • When you open a credit card for someone else. If you open a credit card for a partner, spouse or child and use your information on it instead of theirs, you’re fully liable for any debt they accrue. The person you open the credit card for would be under no legal obligation to repay any debt on the credit card, so opening a credit card for someone in your name can leave you dangerously exposed to debt.
  • When you open a jointly-held credit card with a partner. You could be forced to pay your partner’s credit card debt if you’re joint cardholders, regardless of who built up the debt. If you sign the credit card agreement alone when opening the card, you’ll be solely responsible for any debt. If you and your partner both sign the credit card agreement, you’ll both be equally responsible for any debt you build up.

How to check if you’re responsible for someone else’s debt

Being in a partnership or marriage doesn’t necessarily mean that you’re responsible for the credit card debts of your partner or spouse. If a creditor or debt collector calls, it’s important to check whether you’re actually liable for the debt of your spouse, child, partner or even friend before starting negotiations.

If you opened a joint account with someone and have a jointly-held credit card, this means that you are equally responsible for repaying any debt accrued.

You can check whether you are liable for your partner’s debt by confirming that the credit agreement bears your signature. If not, the responsibility to pay the debt will be solely on your partner. However, if you and your spouse own a joint bank account, the credit card company can sue for money from that account.

You could also be forced to pay any credit card debt accrued by an authorized user of your card. An authorized user enjoys the privilege of using the credit card but has no liability to repay any charges they make. If anyone has access to your credit card details, you should be aware of how they use them so as to protect yourself from misuse of funds and the accumulation of debt you would later have to pay.

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What happens to debt when someone dies?

When someone dies, their assets are usually used to pay for any credit card debt they solely owe. Once all the estate left behind is sold, the remaining debt is said to have died with the deceased and there is nothing creditors can do to recover it. Family members and even partners are not responsible for any of the debt remaining. However, in cases where the deceased had a guarantor for their credit card, the guarantor will be accountable for the debt.

Should a joint credit cardholder die leaving a debt for which a partner is jointly responsible, the surviving partner will be required to clear the credit card debt on their own. If the deceased signed the credit agreement on their own, their partner cannot be liable for any credit card debt left behind — even if they were an additional cardholder and had a hand in the build-up of existing overdrafts and loans. Family members or partners of the deceased can only be accountable for his debt if they were co-signatories in the debt or if they had made an agreement, be it written or verbal, to repay the debt on behalf of the deceased.

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How to pay off someone else’s credit card debt

If you decide to help someone pay off their credit card debt, you should be fully aware of the risks involved, including financial stress and possible damage to your credit score, so that you can prepare yourself to take on their financial burden. If you’re OK with the risks, you have three options:

  • Become a guarantor. This would transfer all liability for the debt to you and allow you to clear the debt from your own account. You’ll need to give your personal information to the bank and sign an agreement transferring credit liability to you.
    • If the debt has already gone into collection, you will not be able to become a guarantor and may be forced to make payments directly to the creditor’s account.
  • Transfer their debt to a credit card in your name. To successfully pay off someone else’s credit card debt, you will need their personal information and the creditor’s details. Be sure that the credit card you transfer the debt to has sufficient credit and notify the creditor that you are assuming the entire debt. However, before you assume the debt, explore getting a balance transfer credit card as a way to pay it off without paying high interest rates.
  • Pay them directly. If you have a close friend or family member in debt and you want to help without risking your own credit, you can send money to your loved one and trust that they’ll use it to pay off the debt. The upside of this is that you aren’t assuming legal liability for the debt. The downside is that you can’t guarantee they’ll use the money to pay the debt.

Find out what institutions offer joint bank accounts

Compare balance transfer credit cards

%
Name Product Balance Transfer APR Balance Transfer Fee Recommended Minimum Credit Score Amount Saved Filter values
0% intro for the first 15 months (then 15.24% to 26.24% variable)
$5 or 3% of the transaction, whichever is greater
680
Earn a $150 bonus statement credit after you spend $1,000 on purchases in the first 3 months. Rates & fees
0% intro for the first 18 months (then 13.24%, 17.24% or 21.24% variable)
$10 or 4% of the transaction, whichever is greater
670
An 18 months 0% intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
0% intro for the first 15 months (then 15.24% to 26.24% variable)
$5 or 3% of the transaction, whichever is greater
680
Earn a $150 statement credit after you spend $1,000 or more in purchases with your new card within the first 3 months of card membership. Rates & fees
0% intro for the first 12 months (then 15.24%, 19.24% or 25.24% variable)
$10 or 4% of the transaction, whichever is greater
670
Earn 3% cash back on up to $10,000 in the first 12 months, then 1.5% on all purchases. See Rates and Fees.
0% intro for the first 12 months (then 15.24% to 26.24% variable)
$5 or 3% of the transaction, whichever is greater
680
Earn $250 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & fees

Compare up to 4 providers

Bottom line

Being forced to carry the liability for someone else’s credit card debt can put a strain on you financially and even ruin your credit rating. By knowing how you can protect yourself from irresponsible card users, who may misuse your credit facility and leave you in financial ruin, you can ensure that you are left in control of your credit card debt and that you are able to dispute any debt that you are wrongly asked to take care of.

Frequently asked questions

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