Debt collectors know that family members have no obligation to pay off their dead loved one's debts, but that doesn't stop them from trying to collect anyway.
Similarly, creditors do not have the right to go after the assets of parents, children (for instance, child support), siblings, or any other family members.
You're not typically responsible for repaying the debt of someone who's died, unless: You're a co-signer on a loan with outstanding debt. You're a joint account holder on a credit card. Note: this is different from an authorized user.
Although federal law prohibits collectors from demanding that a decedent's relatives make debt payments, creditors can try to recoup their losses from accounts that demonstrate joint legal responsibility.
Anyone harassed by a debt collector can bring a FDCPA claim
Innocent parties that are harassed by debt collectors about a debt of a friend, or co-worker, or family member, are protected under the FDCPA. Which means they can also pursue a claim against an abusive or harassing debt collector.
The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debts from you, including: Misrepresenting the nature of the debt, including the amount owed. Falsely claiming that the person contacting you is an attorney.
Let's Summarize... If you're facing debt collection, it's important to understand how the process works and what options you have. If you ignore a debt in collections, you can be sued and have your bank account or wages garnished or may even lose property like your home. You'll also hurt your credit score.
Because so much information exists on the internet, it isn't difficult to contact your family members. Similar to how they locate your information, they will do the same to find that of your relatives. Especially if you once shared an address, such as that of your parents, partner, or siblings.
Sometimes, the decedent leaves behind unpaid debts. If that happens, a creditor could intercept a beneficiary's inheritance to repay the money owed to them. That means that if you're a named beneficiary and the decedent had debt, you might not receive all of the assets left to you in your loved one's will.
Creditors can file claims against the estate, and those claims usually have to be paid before anything is distributed to heirs. Creditors also are allowed to contact relatives about the dead person's debts, even if those family members have no legal obligation to pay.
Inherited money is protected from creditors; even if you're dead, your estate is not liable for debts. This means that debt collectors can't take any funds that have been willed to you. For example: Let's say your grandmother left $50,000 in her will to be used as an inheritance for each of her grandchildren (you).
There's no doubt that you should make payments If your child is struggling to pay a loan or credit card you've co-signed. Refusing to help out in this case would hurt your own credit rating because these accounts are listed on your credit report as well.
The debt is not forgiven because the other person died. You must continue making payments on the account to avoid penalties and negative marks on your credit. Authorized users, however, are not liable for the credit card debt.
If you notify the debt collector in writing that you dispute the debt within 30 days of receiving a validation notice, the debt collector must stop trying to collect the debt until they've provided you with verification in response to your dispute.
Although the unpaid debt will go on your credit report and have a negative impact on your score, the good news is that it won't last forever. After seven years, unpaid credit card debt falls off your credit report. The debt doesn't vanish completely, but it'll no longer impact your credit score.
Additional examples of unsecured debt include medical debt and most types of credit card debt. If you die with unsecured debt, repayment becomes the responsibility of your estate. Your legal estate refers to all the assets, property and money left behind by you or another deceased person when they die.
Yes, a debt collector can take money that you owe them directly from your bank account, but they have to win a lawsuit first. This is known as garnishing. The debt collector would warn you before they begin a lawsuit.
Many people think that because someone has passed away, it will be possible to avoid paying these debts. That's not the case. You personally, and the beneficiaries, are not responsible for debts, but you do have to pay estate debts if there are enough estate assets with which to pay them.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
Along with the aforementioned rights you have under the FDCPA, you have the right to request debt collectors stop contacting you, your place of work, or family members by: Requesting custom communication. Sending a cease and desist letter. Making payments.
Ignoring or avoiding a debt collector, though, is unlikely to make the debt collector stop contacting you. They may find other ways to contact you, including filing a lawsuit. While being contacted by a debt collector might feel overwhelming, talking with them can help you get more information about the debt.
By paying the collection agency directly, the notification of the debt could stay on your credit report longer than if you attempt to use another option, like filing for bankruptcy. When institutions check your credit report and see this information on it, it may harm your ability to obtain loans.
A charge-off can lower your credit score by 50 to 150 points and can also look very bad on your credit report. It signals to potential lenders that you could skip out on your debt obligations for extended periods of time.
If you refuse to pay a debt collection agency, they may file a lawsuit against you. Debt collection lawsuits are no joke. You can't just ignore them in the hopes that they'll go away. If you receive a Complaint from a debt collector, you must respond within a time frame determined by your jurisdiction.