When a loved one passes away, relatives may be contacted by debt collectors looking to recover from the estate. Although a debt collector may try to persuade a family member to pay the debt, according to the Federal Trade Commission, surviving relatives typically have not legal obligation to do so. Here, our probate lawyers will explain who is responsible for paying your loved one’s debts after they die.
Consumer protection against creditors and debt collectors
The Fair Debt Collection Practices Act (FDCPA) makes it illegal for debt collectors to use “abusive, unfair, or deceptive practices” to collect from you. The Federal Trade Commission (FTC) is the consumer protection agency that enforces the Act. A debt collector is considered someone who regularly collects debts owed to others, including collection agencies, lawyers who collect debts on a regular basis, and companies that buy unpaid debts and attempt to collect them.
Who is responsible for paying the debts of a deceased relative?
In the most general terms, the estate is responsible for paying the debts. If there is sufficient money in the estate to pay the debts, then the decedent’s personal representative, who is responsible for settling the person’s affairs, would be responsible for paying any outstanding debts from the estate. However, if there are insufficient assets in the estate to cover the debts, they will usually go unpaid. The only exceptions would be debts that have a co-borrower or guarantor. In those cases, the surviving co-borrower or guarantor would still be responsible for the debt.
What is a spouse’s obligation to pay the debt?
In many cases, spouses are co-borrowers of certain debts, such as credit cards or mortgages. But even a spouse’s obligation may be limited depending on the circumstances. To get a full understanding of what a surviving spouse is required to pay, you should speak with probate lawyers in the state where the deceased person lived at the time of their death. The laws of that state will control these legal issues.
What to do if a debt collector contacts you about a deceased relative’s debt
First, unless you are the personal representative of the estate, you are not required to talk to the debt collector. If you do, you can give the debt collector the contact information for the personal representative. Be sure never to give any personal information about you or your relative, such as social security numbers, birth dates, or account numbers.
How to stop a debt collector from contacting you
There are steps you can take if you want a debt collector to stop contacting you about your relative’s debt. You need to put that in writing and send it by certified mail with a “return receipt.” That way you will have proof that debt collector received it. Also, keep a copy of the letter for your records. Once they receive your letter, they are not allowed under the law to contact you again except to confirm that there will be no further contact or to notify you of a specific action that will be taken, such as filing a lawsuit. If you have questions about your rights, our probate lawyers may be able to help.
If you have complaints or need more information about debt collection
There are two places that you can contact if you have problems or complaints regarding debt collection: your state Attorney General’s office and the Federal Trade Commission. Most states have their own laws that govern debt collection, and those laws may differ from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights. For more information, you can also go to Debt Collection FAQs: A Guide for Consumers. If you believe you or your family member has been the victim of some type of consumer fraud, the FTC would be the first line of defense.
The FTC is responsible for preventing fraudulent, deceptive, and unfair business practices in the marketplace and to provide assistance to consumers. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.
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