Collection of a Deceased Person’s Debt

Collection of a Deceased Person’s DebtThe outstanding debt is paid by the deceased estate upon a person’s death. The priority is given to secured debts (debts secured by collateral), funeral costs, medical bills and taxes, while unsecured debts (those not secure by collateral), like credit card debt, are collected from the remaining funds. If there aren’t enough funds, the unsecured debt may be written off depending on the state law and person’s marital status. There are limits on how much the surviving spouse is due to pay, specified by state probate laws. However, most heirs and relatives cannot be claimed an outstanding debt as regulated by the Fair Debt Collection Practices Act.

In case the unsecured debt was registered as a cosigner relationship, the surviving person, as a rule, carries the responsibility for the debts on the account. In case of an authorized user, the person carries no risibility for the debts of the deceased, since the contract in this case is with the deceased only.

The creditor should be informed of their client’s death by the executor of the estate, the probate court or the lawyer that handles the estate of the deceased. The lender may request verification: a copy of the death certificate.

How to defend against unfair debt collection claims

Even if the person is not responsible for the debt, the debt collector may try to collect it anyway. If the debt collector’s claims are unfair, you may write to this person or to the lender with a request to stop contacting you. If they continue their collections attempts, you can file a complaint by calling the Federal Trade Commission to the toll-free number 877-382-4357.

There are also unscrupulous individuals, who would haunt the surviving family members with false debt claims. Here is what you can do to defend yourself against possible scam debt collectors. Whenever you get a call from an alleged creditor, request a copy of the original contract be sent to you along with the account information. In most cases this will stop the collection attempt, if it is a false one. If the scam creditor pursues their false claim, you may have to contact the Attorney General of your state for help.

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