Dealing with a Deceased Loved One’s Debt Collectors
It is not uncommon for someone to pass away owing debts to credit card companies, mortgage companies or other individuals. That being said, no one wants to deal with these issues after the death of a family member. Everyone dislikes receiving calls from debt collectors dunning their loved one’s estate. While some family members can be contacted by debt collectors, the family is protected from abusive, unfair, or deceptive practices.
Usually the probate estate is responsible for paying any debts the deceased may have left. If there are not sufficient assets in the decedent’s probate estate, the debts will go entirely or partially unpaid. A debt collector may not turn to relatives to try to collect payment (unless they were co-signers or guarantors of the debt). However, the spouse of the decedent may have responsibility for any debts that were jointly held.
Debt collectors are allowed to contact the personal representative (executor) of the estate, the decedent’s spouse, or the decedent’s parents (if the decedent was a minor) to discuss the debts. They may not discuss the debts with anyone else. The only reason debt collectors may contact other relatives or friends is to get the name of the personal representative or spouse. But they cannot say anything about the decedent’s debt to those individuals or even say that they are debt collectors. When speaking with family members, debt collectors may not mislead the family into believing that the family members are responsible for the deceased person’s debts. They also can’t use abusive or offensive language.
Even if you are the person who is responsible for paying the estate’s debts, you can request that a debt collector stop contacting you. To do this, you need to send a letter to the debt collector asking the collector not to contact you again. You should keep a copy of the letter for your records and send the letter “certified” with a return receipt. Once the collector receives the letter, the collector can contact you only to tell you that there will be no further contact or to inform you of a lawsuit. Remember, the estate is still responsible for paying its debts to the extent that it can.
If you have a problem with a debt collector, contact your state attorney general’s office or the Federal Trade Commission at ftccomplaintassistant.gov.
REMEMBER, if you are named as the executor of a decedent’s estate, you DO NOT have to act. If you think that the value of the estate assets will be less than the outstanding debts owed by the decedent, you might consider not opening the estate at all. You can refuse to act and leave the estate to the creditors to administer. Once you open the estate, you will be the person responsible for navigating all of the creditor issues and determining who gets paid and how much they get paid. You will be responsible for bringing all of the parties to agreement when apportioning the estate assets among the creditors and could be personally liable if you do not apportion assets correctly and without agreement. For all of this work, you are likely to receive little monetary payment. Perhaps letting the creditors deal with untangling the mess is the better approach.
For more information regarding Estate Creditors, Estate Administrations and Elder Law and Estate Planning in Pennsylvania, please contact Douglas L. Kaune, esquire at 610 933 8069 or email him at dkaune@utbf.com. Unruh, Turner, Burke & Frees, P.C. is a full service law firm which has three convenient office locations in Phoenixville, West Chester and Paoli, Pennsylvania. The firm primarily services clients in Chester, Montgomery, Delaware, Philadelphia, Bucks and Berks Counties, but can represent clients throughout Pennsylvania.
