When a spouse passes away - New York courts tell Palisades Collection and American Express surviving spouses are not liable for deceased spouse's credit card debt unless companies prove surviving spouse explicitly agreed to pay

Can you be held liable for your wife's or husband's individual credit card debts if he or she passes away? The answer is dependent upon applicable laws in each individual state. Here, we will address New York only.

In New York, a spouse is generally not liable for the individual debts of the other spouse. Palisades Collection Company, LLC. v Velazquez, 910 NYS2d 406 [NY Sup Ct App Term 2010]. In the Palisades case, Palisades Collection tried to collect from Maria Velazquez on an account that had been established between a credit card issuer and Ms. Velazquez' former spouse, and not with Ms. Velazquez herself. The court granted summary judgment to Ms. Velazquez on those grounds, and denied summary judgment to Palisades Collection due to the numerous insufficiencies in its case – a conclusory affidavit, account statements reflecting no purchases by the defendant and no proof of an agreement extending credit to the defendant.

But what if you shared a credit card with your spouse? What then? The answer as to your liability in such a case is: maybe. If you were a co-signer with your spouse on the application for credit, and agreed to be jointly responsible with your spouse for payments on the card, then likely you will be considered liable for charges made on the account, even if all of those charges were made by your spouse.

However, if you were not a co-signer but simply an authorized user of the card – that is, your spouse gave you permission to use the card, but you never signed any document agreeing to be responsible for payments on it – then in most instances you are not liable for your spouse's debts. This applies not only to spousal relationships, but any co-signers or authorized users.

In New York, credit card issuers cannot get around this rule by placing a provision in their agreements making authorized users liable. In such circumstances, the creditor must prove that the user specifically agreed to that provision. American Express Travel Related Services Co. v Seidenfeld, 781 NYS2d 662 [NY Sup. Ct. 2003]. In the American Express case, the court held that American Express could not prevail on its summary judgment claim against the secondary user because it had not proved he had received an agreement that explained his obligations under the account, or whether his use of the card made him liable under that agreement.

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