New Jersey residents who have a credit card with Chase and subscribe to their Payment Protector plan are likely to be dismayed to hear that the program is ending. The program was designed to ensure that if cardholders who lost their jobs or suffered a disability, their credit card debt would be put on hold for up to two years. It also protected people from having up to $25,000 of debt passed on to their estate if they died while they still owed a balance on their card.
To participate in this program, cardholders were charged a fee, usually about one percent of their total balance. However, since this program is ending, many people will have paid for this protection for no reason. This is especially true for elderly cardholders who will end up losing the protection for their estate. Without the program, before someone’s assets can be distributed after they pass on, the balance on their Chase card will have to be paid first.
In spite of the fact that people may have paid thousands of dollars in protection fees, in some cases instead of greatly reducing their credit card balances, they will be left with nothing to show for it as of May 2014. While the bank’s choice to end the program may not be ethical, it is completely legal. The agreement for the program states that the terms of it can be changed at any time.
If someone is suddenly facing large amounts of credit card debt and has no realistic way of paying it off, bankruptcy could eliminate most or all of it. A lawyer could explain what the bankruptcy process involves and help those with overwhelming debt with their filing.
Source: LA Times, “Debt after death: Chase pulls plug on credit card insurance plan“, David Lazarus, October 07, 2013