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Dealing with a deceased relative’s debt

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Especially during this time of crisis, dealing with the death of a loved one is hard. Dealing with a debt collector calling about their debts can make it even harder. If you’re in this situation and a debt collector calls, it’s important to know who is responsible for those debts, and what a debt collector can — and cannot — do to collect payment.

Here are some things to know:

  • A debt doesn’t go away when a person dies. But that doesn’t (usually) mean you owe it, either. The deceased person’s estate owes the debt. If there isn't enough money in the estate to cover the debt, it typically goes unpaid. There are some exceptions, though. For example, you could be responsible if you were a co-signer, or in some cases if you’re the person’s spouse. Learn about other possible exceptions to the rule here.
  • Debt collectors may only talk with certain people about a deceased person’s debt. Collectors can discuss the debt with the deceased person’s spouse, parent (if the deceased was a minor child), guardian, executor or administrator, or any other person authorized to pay debts with assets from the estate. The debt collector may not talk to anyone else about these debts. If they don’t know how to reach the right person, they can contact other relatives to ask for the correct contact information. But they can call each person only once, and they can’t get into the details of the debt or ask the relative for payment on these calls to gather contact info.
  • Debt collectors may not bend the truth to make you pay. Debt collectors cannot lie or imply that you or any other family member legally has to pay the estate’s debts out of your own pocket. It’s illegal for them to harass you to pay the debt yourself. If the deceased left debts and no assets, it’s usually not your responsibility to pay.
  • You have rights. If you think you don’t owe some (or all) of the debt, or you just don’t recognize it, send the collector a letter disputing it. Be as specific as possible about why you think the debt is wrong – but give as little personal information as possible. Once you get the validation notice (which says how much you owe, to whom, and what to do if you don’t think you owe the debt), you have 30 days to send the dispute letter. By law, the collector then must stop contacting you – though the debt doesn’t go away. But, if the collector sends you written verification of the debt, they can start contacting you again. If the collection calls get to be too much, you can stop them. Just send the collector a letter telling them to stop contacting you and the estate. Keep a copy for your records. Stopping the calls won’t cancel the debt. You still might be sued or have debt reported to a credit bureau.

For more information, read Debts and Deceased Relatives.

Blog Topics: 
Money & Credit

Comments

How is a first mortage treated?

Hello, i dn't think another should be responsible for another debt if their name is no where on. I feel that they have passed away they debt should be closed out as well with proof of death. And families that have death in their family should be bother with that during their grieving period of a love one. Thank you

We have been harassed about my dads debt,. the only debt he left was his hospital bills from when he passed. We have been told that mom might lose her house which was paid off by both of them. Shes retired and doesn't even get enough to pay her own bills which my wife and I help, we also pay for her taxes and home insurance. We haven't had any court orders or any other notice of anything other than a collection agency. Some of them write off what he owed but this particular one is being very aggressive.

When my husband died, he left a large amount of debt of which I hadn't been aware. Knowing how he loved to spend other people's money, I waited for the bills to show up.

I also notified the county Register of Wills. After receiving a copy of his death certificate, they provided official documentation naming me as executor.

Make it easier on your family; make out a will! Not making one won't stop you from dying. It will, however, make it more difficult on your grieving family. When you die, they'll already have enough to deal with. Don't add to it because you didn't want to face your eventual death. Don't wait. You could die at any moment in a car accident, a fall, a heart attack. Death isn't just for other people.

Thinking a person's death could afford scammers the opportunity to try and claim money not owed to them, I contacted the credit reporting agencies to report my husband's death. I provided a copy of his death certificate, along with the official paperwork naming me his executor to one of them, and requested a copy of his credit report. They sent it to my quickly.

Using the combined info, and working with the Register of Wills office, I was able to determine who was actually owed what. Because he owed more than he had, the amounts had to be pro-rated, meaning they receive only a portion of what was owed.

The Register of Wills office also informed me that no matter if a company demanded I send them a copy of the death certificate and Letters of Administration paperwork naming me as executor, I did not have to do that. I only had to tell them if they wanted proof of death, they should contact that office, and provide them with the address.

You will need access to email accounts. There are a lot of memberships only through email that will need canceling before you shut down the accounts. Some you may need to use via the app on the individual's phone so don't cancel that account right away.

To make it easier on executors, make sure you and your loved ones leave a list of all memberships, all accounts, all user names, passwords, and verification info.

Canceling memberships, subscriptions, and catalogs can be a pain. For months, one clothing company kept sending their catalogs to my husband no matter how many times I called. Finally, someone with a heart canceled it.

Also be sure to open an estate account at your bank in which to deposit funds and from which to pay creditors. You will need to obtain a tax id number from the IRS to use with it.

what about a debt that is in the roommates name of which they have expired I was told I got benefits since I live here and these bills are a ding to my credit report Not married to them just residing at the residence

Excellent and informative information! Thank you for sharing this with us. best regards consumer 101

Very informative

Thanks i didn't wanna loose my family homes

My issue as the administrator of my parents estate is not with paying off their debt. Both my mom and dad passed away on the same day. They have some credit card debt and it’s been six months since we lost them and I’m just now seeing their bills. Am I responsible for late fees for the last six months? I’m assuming that whatever they owed at the time of there death is what the correct balance due should be. Anyone?

Ex: if they owed $1000 on a credit card but have been getting charged $25 a month for six months, I don’t feel like it’s fair that the credit card get paid $150 in fees etc...

My mother passed away in April. My nephew tried to get into her bank account without permission on the same day she passed away. His attempt was unsuccessful and the bank froze mom's account as they should have. His selfish act has cost us nothing but more pain. My mother was living with my daughter at the time of her death and my daughter had saved up several thousand dollars in anticipation of my mom's death to pay for her cremation. My daughter had legally obtained "Power of Attorney and Advance Directive for Health Care" but this is only good if the person is living. Mom's cemetery plot and marker were paid for years ago when my dad passed away. She did not have a Will and I don't know what to do. My son-in-law has paid out over $3,000 which includes cremation and funeral home costs and I can't pay him back because her account is frozen. What should I do in this situation? My heart is heavy with grief and my pride and integrity feel jeopardized. If anyone could offer advice I would be grateful. I do not have the money to pay a lawyer.

You might be eligible to get free or low cost legal help, depending on your income and other circumstances. You could call the Bar Association in your state, city, or county and ask if they have information guides, or a list of lawyers that help people for free, or lower costs. You may want to ask the person who drew up the Power of Attorney and Advance Directive for Health Care if they can refer you to someone who can help you. 

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