Reader Question: Will Credit Card Payment Protection Pay Off This Credit Card?

Over the weekend, I received this reader question regarding a credit card and payment protection:

Mother transferred sisters debt to mothers Discover card.  Mother passed.  Discover card has ppd plan. Is the debt insured or will be paid off? Sister would like to pay yet has no assets. Father still alive and card is also in his name as well as mothers. Father did not know of debt assistance and is on fixed income.

There are a few unfortunate circumstances apparent in this situation:

1. Condolences on your mother's passing. This is never an easy time, and money issues never make it any easier.
2. Once that debt is transferred, it becomes the possession of whoever has the card. In the eyes of the credit card company (and the law most likely) that credit card debt is no longer your sister's.
   
3. Since your father is on the credit card, and still living, the debt is his now. I could be wrong on this, but since your mother did not have the card on her own, chances are that the payment protection plan on the credit card will not be kicking in.

In this circumstance, you will have to contact Discover to find out what your options are. If you explain that your father is on a fixed income, most credit card companies will come up with a modified payment plan that allows for manageable payments to be made until the card is paid off. In most cases, however, this means that the credit card account will have to be closed -- no new charges or debt can be placed on the card in such a situation.

If your mother had life insurance, it is possible to pay off some of her debts with the payout. Another option is to pool available resources (your family members) to make larger payments until the debt is paid down.

You might try seeing a financial adviser, or looking in your local area for folks who help those with specific income situations with financial planning for free for your father. Since he is on a fixed income, it would be wise to try and get everything squared away for him. Some college accounting programs offer free assistance with financial planning and advice for those who need help and can't afford high fees.

Unfortunately, it does not appear that you will be able to take advantage of the credit card payment protection. I am sorry that that this situation has become rather dire, and I wish you the best in trying to resolve it. Credit card debt is never easy to deal with -- and it is even hard to pay off.

Disclaimer: I am not a financial professional. Any information you get from this site is not intended as advice. It is likely to be incomplete, and it may not apply to your individual circumstance. Do your own research, consider your situation and/or consult a professional before making money decisions.