Family Forum / Parenting / Parenting / May 2006

It could be for real. We don't know what Pookie and Christian
Williamson's regular jobs are.

This is covered in part here:

http://www.snopes.com/business/bank/deadcard.asp

However they don't really say yea or nay.  Laws vary from state to
state but generally all debts are due and payable on death of the
borrower and all agreements and contracts terminate on the date of
death (found from the death certificate).  When a company or person
who holds such a loan is notified of the death he is to forward a
demand for payment of the balance to the executor of the estate  (If
you don't name an executor in your will your state has an office that
handles this).  Because the contract terminates on the date of death
all terms in these contracts terminate as well.  This includes such
things as repayment terms, interest, and late charges.  The company
can only bill the executor for the ending balance.  

This makes the story as posted extremely unlikely.  Citibank, like any
other major lender, has a policy in place for these situations, which
generally would be to forward the account to their Collections
Department after being notified of the death of the borrower.  The
customer rep would try to get a copy of the death certificate and the
mailing address of the executor to make Collections' job easier.
Collections would confirm the death through county records and send a
closing bill for any balance remaining as of the date of death to the
executor of record.  Interest, late fees, etc., charged after the date
of death would be uncollectable.

If the bill isn't paid within a reasonable time Citibank can sue the
estate to recover the debt and costs of collection but it gets hairy.
"Secured" debts, such as house mortgages, 2nd trust deeds, and loans
for tangible assets (cars, furniture, etc.) have precedence over
"unsecured" loans, which most credit card debts are, in the execution
of the estate.  With secured loans sometimes there's a provision "upon
death of borrower, lender may reclaim security, sell at auction, and
recover the remaining balance of the loan and costs of sale if not
repaid within <xx> days of demand." though usually the lender allows
the executor to deal with this if he can.  With an unsecured loan if
there's not enough value in the estate to repay the loan after dealing
with the secured loans (and there often isn't) the lender gets to eat
the paper.  This is another reason credit card interest is so high:
The lender assumes greater risk.
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Capitol One - What's in YOUR freezer?