Hacker News Reader

Comment by julianj | Hacker News Reader

If a person takes out a loan to buy a car then the financing company actually holds the title to the vehicle. You can't give away something you don't own.

View on HN

Where I've unfortunately made the water a bit muddy here because the story is about a credit card and not a car, is that you don't usually buy a car with a credit card.

(But hypothetically if you do, and it was simply processed as a regular card transaction, would the credit card company potentially have any claim on the title?)

In the US, a credit card company doesn't generally have any claim on the merchandise, credit cards are an unsecured loan, and the claim is on dollars from the account holder and/or card holder or their estates. In case of fraud or bankruptcy, there may be some clawback opportunities on transactions though.

Yes, thank you, this clarifies what I'm trying to express.

I did not know the difference between a secured and an unsecured loan and that explains a lot. Cases of fraud or bankruptcy are really what I'm mainly talking about.

In most cases where the actual estate is not in the red, the estate will pay the debt and nothing should get repo'ed. If there were a lot of gifts made and cash transferred shortly before the person died, and now the estate is broke, then someone from the creditors' side is likely to seek more information about it, and exercise clawback opportunities.

In bankruptcy, there's a period of transactions that can be reversed, up to 12 months for close relationship. But it probably becomes rapidly difficult to identify these transactions after the borrower dies. I would expect most creditors to send a couple letters and write off the debt, unless it was egregious.

Reply on news.ycombinator.com