Where Do Your Debts Go When You Die?

Are you Responsible for the Debt of a Deceased Relative?

When a family member dies, the last thing you want to think about it money. But, unfortunately, you do sometimes have to deal with money matters during a time of deep sadness. In addition to paying for the funeral and those associated costs, you can also be faced with unpaid bills your loved one left behind.

If you start receiving phone calls from debt collectors regarding debts from a deceased loved one, there are several things you need to know. Don’t just pay the bill, even if the collection agent makes threats. Instead, make sure you are informed about your rights and responsibilities.

There is actually a federal law that protects you from a deceased relative’s debts, the Fair Debt Collection Act, which is enforced by the Federal Trade Commission. Here’s what you need to know about the Fair Debt Collection Act.

Who’s responsible for debts after someone dies?

In most cases, the debt gets paid with money from the deceased’s estate. If there is not enough money in the estate to cover the bills, they usually remain unpaid.

Am I legally required to pay off any remaining debt?

Most relatives are not legally required to pay any remaining bills. In the case of a spouse, you may be obligated to pay off debt, but each circumstance is different. We can help you examine your individual situation.

What should I do if a debt collector contacts me?

The most important thing is to not give any of your personal information out to the debt collector. There have been reported cases of con artists using the obituaries as a spring board for identity theft. If you are asked for your social security number, birth date or any other information, do not supply it. Instead, give the debt collector the name and phone number of the executor of the estate. If you are handling the estate, ask for proof of the debt and see if you can negotiate a compromise or payment plan.

Can I ignore debt collection activity?

Yes, you can, but that’s not likely to make it go away. Direct the debt collector to the estate’s executor or, if that is you, attempt to work out a payment plan. Ignoring phone calls or letters is just likely to increase the activity, not cause to to stop.

How can I stop the debt collectors from contacting me?

Write a letter to the debt collection agency asking her to stop attempting to collect the debt from you. Make sure you send the letter by certified mail so you receive a receipt when it is delivered. Once the debt collector has received the letter, you can only be contacted for two reasons – to tell you about a specific action, like a lawsuit, or to inform you that collection efforts are ending.

If debts from a deceased relative are causing you problems, let Mapes Law Offices help you determine the best course of action. Call today to schedule your free consultation.