THE FAIR DEBT COLLECTION PRACTICES ACT AND THE COLLECTION OF DEBTS AGAINST A DEAD PERSON
When someone dies, he or she ordinarily dies with debt. Sometimes assets of the Estate are sufficient to pay the debts, sometimes not. Creditors (or their hired debt collectors) may seek payment of the debts from friends and relatives despite the fact there is no legal obligation from any person other than the Estate of the Dead Person to pay such debts. It is important for spouses, parents, other relatives and friends of a Dead Person to understand the limits of their responsibility to pay a Dead Person's debt.
II. The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (the "FDCPA") was enacted by the United States Congress in 1978, and controls the way creditors may lawfully pursue collections on consumer debt. The aim of the FDCPA was to eliminate abusive collection practices.
When a person dies, the first thing debt collectors must do is identify the appropriate person or persons with whom they can discuss the Dead Person's debt. If a Personal Representative (an administrator or executor under authority of a Court) has been appointed by the Will (or by any other means), the debt collector must only contact that person. The identity of such a Personal Representative is a Public Record and is readily available to a debt collector. Even though it is easy to find, lazy or unscrupulous debt collectors often turn to cold-calling relatives of the Dead Person to ask whether such person is "handling the Dead Person 's final affairs." Debt collectors may also send letters addressed the Dead Person's (or relative's) address to "The Estate of" or "The Executor or Administrator of the Estate of," disclosing the details of the debt, and requesting the addressee to pay the debt, without explaining that there is no legal obligation to do so.
The FDCPA requires a debt collector contacting a relative or other person concerning the location of a debtor to:
i. Identify himself;
ii. State that he is confirming or correcting location information concerning the debtor; and
iii. Identify, if requested, his employer.
The collector is not permitted to state that the person owes any debt. The individual who is contacted can freely choose whether or not to provide location and contact information which in the case of a Dead Person is the Personal Representative. When a debt collector is attempting to locate the person with authority to act on behalf of the Estate of the Dead Person, the debt collector must state that he is looking for the person who is responsible for paying the outstanding bills of the Dead Person "from the Estate ." Until such person is located, debt collectors are prohibited from revealing the existence of a debt to avoid the possibility that a recently-distressed relative will simply pay the bill for which there is no legal obligation to do so.
Debt collectors may not use leading questions to determine the identity of an Personal Representative, such as whether the individual paid for the funeral or is opening the Dead Person's mail. Finally, debt collectors must refrain from misleading persons about their liability for the obligation to pay the Dead Person's debt. To that end, debt collectors must clearly state that they are seeking payment from assets of the Dead Person's Estate, and that the individual is not required to use their own assets or any assets they owned jointly (which upon death belongs solely to the survivor) with the Dead Person to pay the debt.
III. Communicating with Authorized Individuals of a Dead Person 's Estate
Debt collectors must refrain from unfair, deceptive, or abusive practices in violation of the FDCPA. In the context of collecting against a Dead Person's Estate, debt collectors must not contact any such individuals "at any unusual time or place or at a time or place known or which should be known to be inconvenient."
Consumer debt incurred during life retains its quality as consumer debt after death. Debt collection practices must conform to the legal standards of the FDCPA. With few exceptions only, the Dead Person's Estate is obligated to pay a debt; not spouses, children other relatives, business associates or friends. For questions relating to the administration of Dead Person 's Estate, collection of consumer and non-consumer debts, bankruptcy, and other matters, please contact the attorneys at Cunningham & Chernicoff, in Harrisburg, Pennsylvania.