I want to talk to you today about a really sensitive topic: deceased debt collection. What happens when somebody dies? Where their debts go? Here are the five things you need to know about deceased debt collection.
- The first thing is when somebody dies their debt doesn’t die with them. That’s right. You might think when a person is passed away their debts get extinguished. Well, not so fast. When somebody dies, frequently their estate is probated or administered through their court system. Their assets get pooled and after the payment of debts, the remainder gets distributed to creditors who are owed money, who have filed proofs of claim. The debts don’t die. The debts have to be paid off from the assets of the deceased person if the deceased person has any assets. Now, these rules vary from state to state. They’re complicated. You just have to know the concept.
- The second thing that you have to know about deceased debt is that debt collectors may speak with the executor of the estate or the children or the spouse of the deceased person to find out information about who is handling the estate, who the administrator of the estate is. Now it’s a little counterintuitive because normally when the person’s alive, third parties may not be contacted by a debt collector, but here the situation is a little different. The deceased person has died so debt collectors don’t have anybody to contact. Debt collectors may contact third parties.
- The third thing you have to know about deceased debt collection is the purpose of the calls. The administrator or the spouse or the children, whoever it is that the debt collection company is contacting, does not owe the money. Remember, the deceased person owes the money, not whoever’s administering their estate. It’s very important; they may not demand money from you at any time. They can only call to find out who the administrators to enable them to file a proof of claim or other notification with the probate court so that the money can be distributed to them.
- They cannot disclose and the fourth things they cannot disclose information about the debt. They can only say that they’re calling about the estate of so-and-so and they’re calling to get information. The privacy laws that guard the private financial information of people are still in effect even after a person dies.
- So the fifth thing you need to know about deceased collection situation is this: if a debt collector is abusing harassing, annoying, illegally trying to get money out of you, you have rights.
The FDCPA provides recovery for up to a thousand dollars for fair debt collection practices violations. You have rights. Call us today to figure out if your rights have been violated. It’s really important that you call as soon as possible when you suspect something is amiss or something is wrong.