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Collecting Debts From the Deceased

On Behalf of | Jan 14, 2013 | Consumer Protection

The Fair Debt Collection Practices Act (“FDPCA”) is the federal statute that governs how collection agencies can operate.  The law protects consumers from abusive collection practices by debt collectors.  A fast growing area of collection is collecting debts from deceased individuals….because when you die…your debt does not necessarily die with you.

Collecting debts from the deceased often leads to contacting the person’s family and friends for repayment, so it is important to understand the law and your rights to protect yourself and your loved ones estate.  It is important to understand when you are being contacted by a collector regarding a debt owed from someone who has passed away, it is unlikely that you are responsible for repayment of the debt.  When a friend or relative passes away, collectors often swoop in and use your fragile state to coerce you into payment on your loved one’s behalf.  Collectors often use phrases like “it’s the right thing to do” or “protect [your loved one’s] good name”.  But the reality is, most of the time you have no legal obligation to make payment

As a general rule, consumers are not responsible for making payment on another consumer’s debt, with exception of course.  For example, if you were a co-signer on a credit card or an account, then you would be held liable for the debt after the other account holder was deceased.  Additionally, in several states, spouses are responsible for repayment of each other’s medical debts even after death.

As a starting point, under the FDCPA, a debt collector can contact a third party in an attempt to collect but is prohibited from
disclosing any information regarding the debt or even that a debt exists.  The purpose of the call can be to obtain location information about the debtor.   A collector can also request information from a third party such as the name, address and phone number of the deceased person’s spouse, executor, or any other individuals authorized to pay the deceased’s debts.

The FDCPA allows a debt collector to speak with the executor of the deceased’s estate, the personal in charge of distributing the deceased’s assets.  The law permits a collector to discuss the debt openly with the executor because he has the authority to pay off the debt from the assets of the estate.       If you have lost a loved one and are being contacted by a debt collector and feel that his or her conduct may have violated the FDCPA, contact SmithMarco P.C. for a free case review