Estate Debt of Deceased Person

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Estate Debt of Deceased Person

by Tyrone
(Readers, PA)

My father recently dies in June. I have informed all creditors that he had no estate; thus no funds for medical invoices. I did not have power of attorney, nor any fiduciary responsibilities. I have received a letter stating they would place the debt on my credit profile, for a medical expense of my father. Can they legally place that information on my credit file? Any information would be helpful.

Thank you

Tyrone

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Estate Debt of Deceased Person

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Apr 09, 2010

medical debt after estate is closed
by: Gerri

Jeff,

Thanks for sharing your story. You apparently aren't the only person experiencing this kind of problem. It received enough attention to somehow make it into the recently passed Credit CARD Act. Under the CARD Act, the Federal Reserve Board is assigned with the following:

140A Procedure for timely settlement of estates of
decedent obligors - The Board, in consultation with the Federal Trade Commission and each other agency referred to in section 108(a), shall prescribe regulations to require any creditor, with respect to any credit card account under an open end consumer credit plan, to establish procedures to ensure that any administrator of an estate of any deceased obligor with respect to such account can resolve outstanding credit
balances in a timely manner.

Of course, you'll note that those regulations only apply to credit card debts, not medical debts, and may not apply retroactively to your situation.

We'll see if we can get some more advice for you on your situation.

Apr 08, 2010

Medical debt collection - after estate is closed
by: Jeff

This is an interesting thread as I have a similar situation. After my father's passing, I diligently paid valid debts from his estate. Note: the estate was small enough that it did not go through probate. Most of the medical bills were incorrect, but after being corrected I paid them.

One bill was incorrect, and I determined from discussing with the medical billing office and the insurance company that (a) the expense was *not* billed to insurance (only some of the charges were); and (b) insurance said it would be covered. I asked the medical billing office to bill insurance. Note that no EOBs were issued from insurance unless a balance was owed by the patient, and no EOB was ever received.

I never received another bill. A year after my father died passed, and I filed the final income tax and distributed the remaining funds among my siblings. Apparently the medical provider did not bill insurance. Then a collection letter is sent to my father. If anyone is responsible for the debt, it is insurance. But the medical provider didn't bill them. It has been more than one year. My state has a bar on collecting debts on the deceased after one year - but that's a gray area since a bill was sent within that year. So I'm not sure what to do; do I tell them the estate is settled? Ignore the contact (it was addressed to my father, not to me or the estate)? It's almost impossible to get medical providers and insurance providers to cooperate; there's no way that a debt collector is going to work with insurance.

In summary, I think the medical provider was lazy in billing insurance. The bill would not have been owed by my father had he lived. Therefore the bill is not part of the estate. But by turning it over to collections, it's now my problem. Any thoughts are appreciated.

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Apr 08, 2010
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Submitted by: Jeff

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This is an interesting thread as I have a similar situation. After my father's passing, I diligently paid valid debts from his estate. Note: the estate was small enough that it did not go through probate. Most of the medical bills were incorrect, but after being corrected I paid them. One bill was incorrect, and I determined from discussing with the medical billing office and the insurance company that (a) the expense was *not* billed to insurance (only some of the charges were); and (b) insurance said it would be covered. I asked the medical billing office to bill insurance. Note that no EOBs were issued from insurance unless a balance was owed by the patient, and no EOB was ever received. I never received another bill. A year after my father died passed, and I filed the final income tax and distributed the remaining funds among my siblings. Apparently the medical provider did not bill insurance. Then a collection letter is sent to my father. If anyone is responsible for the debt, it is insurance. But the medical provider didn't bill them. It has been more than one year. My state has a bar on collecting debts on the deceased after one year - but that's a gray area since a bill was sent within that year. So I'm not sure what to do; do I tell them the estate is settled? Ignore the contact (it was addressed to my father, not to me or the estate)? It's almost impossible to get medical providers and insurance providers to cooperate; there's no way that a debt collector is going to work with insurance. In summary, I think the medical provider was lazy in billing insurance. The bill would not have been owed by my father had he lived. Therefore the bill is not part of the estate. But by turning it over to collections, it's now my problem. Any thoughts are appreciated.

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Apr 07, 2010

Debt payment for my father's account
by: Dennis

GERRI:
Thank you for answering my situation with regard to my father's passing and a DVA payment that did not get processed due to the lack of immediate attention by the Hospital Admin staff. I have decided that the debt is due and payable however I find that in doing so I am covering it out of my personal bank account in small payments. After closing out my dad's account and paying off all accounts receivable the remaining monies was split between the other siblings and the account closed. The only thing left to do is my dad's tax account which I now find he will get a refund. (first time ever)the cheque if this is true will be made payable to the "estate of _______" There is no such account open for a deposit, so now what do you suggest I do with this cheque since the tax dept. will probably send out an assessment notice that the tax return can be reviewed to determine if all entries are factual up to three years later here in Canada.
What options do I have?

Apr 06, 2010

Medical debt question
by: Gerri

Dennis-

I am very sorry to hear of your father's passing. I am not sure I fully understand your situation, however if I am reading your question right, it sounds like the DVA paid for part? Or all? Of the hospital bill that the hospital is now trying to collect from you. Is that correct?

Generally, when someone dies, their children are not responsible for their debts. The creditor can try to collect from the estate if there is one.

But if the DVA did pay the hospital bill, I would suggest you offer them that amount to settle the account. That seems like it would be a fair solution.

If the hospital tries to pursue collection against you, I would encourage you to talk with a consumer law attorney with experience in debt collection/medical bill cases. You can locate an attorney locally, or call the Collection Complaint Hotline at 888-711-5143 for a free, confidential case evaluation.

I would be interested in hearing how this turns out for you. Please share and update using the comments option below.

Apr 05, 2010

Medical Debt
by: Dennis

My father passed away July 9th 2009 - in May he was admitted to an extended hospital care unit. A portion of the payment for medical services was covered by Dept. of Veterans Affairs and the rest of the medical coverage was to be paid by him. I had power of attorney so when the account was to be paid I provided the appropriate personal payment. The hospital was notified on 2 separate occasions that the remaining amount was to be directed to the Dept. Veterans Affairs, which they claimed was going to be done. The paper work required by the Hospital was never completed in a timely and reasonable time period so three months after my father died the Hospital has sent me the bill to pay since they discovered that DVA paid the initial payment which they calculated and put it directly into my father's bank account back in the beginning of June for the payment. No instructions came with this amount other than a direct deposit cheque. My father in the meantime was awaiting funds from DVA for other matters and it was thought that these funds were part of the payment he was waiting for.

It is noticeable that DVA in calculating their amount payable knew what to pay and they did so without ever receiving documentation from the hospital. SO my question is AM I NOW RESPONSIBLE FOR THIS DEBT of $423.40. to the Hospital.

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Apr 05, 2010
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Submitted by: Dennis

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My father passed away July 9th 2009 - in May he was admitted to an extended hospital care unit. A portion of the payment for medical services was covered by Dept. of Veterans Affairs and the rest of the medical coverage was to be paid by him. I had power of attorney so when the account was to be paid I provided the appropriate personal payment. The hospital was notified on 2 separate occasions that the remaining amount was to be directed to the Dept. Veterans Affairs, which they claimed was going to be done. The paper work required by the Hospital was never completed in a timely and reasonable time period so three months after my father died the Hospital has sent me the bill to pay since they discovered that DVA paid the initial payment which they calculated and put it directly into my father's bank account back in the beginning of June for the payment. No instructions came with this amount other than a direct deposit cheque. My father in the meantime was awaiting funds from DVA for other matters and it was thought that these funds were part of the payment he was waiting for. It is noticeable that DVA in calculating their amount payable knew what to pay and they did so without ever receiving documentation from the hospital. SO my question is AM I NOW RESPONSIBLE FOR THIS DEBT of $423.40. to the Hospital.

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Jan 26, 2010

Thank you so much.
by: Tyrone

I would like to thank you for the advice given. I indeed appreciate the thoughts you provided regarding my father. Tyrone

Jan 22, 2010

Debt of Deceased Parent
by: Gerri

Tyrone,

Parents debts should not appear on their children's credit reports unless they cosigned or the account is a joint account.

It sounds to me like there is a good chance the creditor is breaking the law (and maybe two) by threatening to put this debt on your credit report. I would strongly urge you to contact a consumer law attorney with expertise in debt collection/credit reporting laws. You can call a local attorney or the Collection Complaint Hotline at 888-711-5143 where you have the opportunity to talk with an attorney who can advise you on next steps. (No charge for this consultation, and if you have a case, there will be no charge unless you win.)

I would also recommend you pull copies of your credit reports and your credit scores to see whether it has been reported yet. Be sure to keep copies of that information (whether it's on there or not). If the account is reported and your credit scores drop as a result, you may have a case for credit damage. Credit.com offers a free Credit Report Card that will analyze your Trans Union credit data. (It's truly free, no credit card required.)

Please accept our condolences for the death of your father. And let us know how this turns out please.

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Estate Debt of Deceased Person

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Estate Debt of Deceased Person