Estate Debt

by LaTicia

How to respond to collection calls when there is no money, but there are assets (houses).

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Mar 08, 2012
Estate Debt

I am assuming that your spouse (or another relative) died and you are getting calls from debt collectors now about the deceased's debts. If I am right, here is what you should know:

When someone dies, the deceased's estate goes through a legal process called probate (or something similar) to inventory all of his or her assets, give the deceased's creditors an opportunity to be paid out of those assets, and to ensure that whatever is left in the estate is distributed to the beneficiaries of the deceased. When a deceased person dies owing more money to creditors than there is in the estate some creditors will not get paid and with a few exceptions, they are simply out of luck. Therefore, those creditors as well as debt collectors are not legally entitled to try to get payment from the deceased's relatives. However, many debt collectors ignore that fact and try anyway.

The exceptions are if any of the unpaid debts are joint debts. In other words, if you and your dead loved one both signed for a debt -- you had a mortgage together, you shared joint credit cards, you got a car loan together, and so on -- and that debt is not paid in full, then you are legally obligated to pay it because it is as much your debt as the deceased's. If you do not, you can expect that debt collectors will call you eventually, you may be sued, and if the lawsuit results in a judgment against you, the other party can try to collect on the judgment by garnishing your wages, taking money out of your bank account, seizing an asset or putting a lien on an asset you own.

If you are not legally responsible for any of the debts you are being contacted about, then next time a debt collector calls you, tell him not to contact you again and follow up by putting that request in writing, making a copy of your letter for your files and sending the original to the collector via certified mail with a return receipt requested. If the collector continues to contact you, he has violated federal law and you should schedule a free consultation with a consumer law attorney.

Read this to learn more about the debts of the deceased: deceased person’s debt FAQ.

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