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 deceased to pay such debts. It is important for spouses, parents, other relatives and friends of a deceased to understand the limits of their responsibility to pay the deceased's debt.
If a member of your family has recently passed away, and you are being harassed by creditors, we can help. Cunningham & Chernicoff, P.C., has been protecting the rights of Pennsylvania families for more than 30 years. Our experienced probate and estate attorneys are prepared to handle a wide range of estate planning and administration concerns, including those relating to aggressive debt collectors.
Debt Collectors Engage in Predatory 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 deceased'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 deceased to ask whether such person is "handling the deceased's final affairs." Debt collectors may also send letters addressed to the deceased'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 Fair Debt Collection Practices Act Establishes Clear Limits
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 the kinds of abusive collection practices described above.
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.
What Does the FDCPA Really Mean for Me and My Loved Ones?
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 for the deceased's personal representative. When a debt collector is attempting to locate the person with authority to act on behalf of the estate, the debt collector must state that he is looking for the person who is responsible for paying the outstanding bills of the deceased "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 when he or she has no legal obligation to do so.
Debt collectors may not use leading questions to determine the identity of a personal representative, such as whether the individual paid for the funeral or is opening the deceased's mail. Finally, debt collectors must refrain from misleading persons about their liability for the obligation to pay the deceased's debt. To that end, debt collectors must clearly state that they are seeking payment from assets of the estate, and that the individual is not required to use his or her own assets or any assets he or she owned jointly (which upon death belongs solely to the survivor) with the deceased to pay the debt.
Rules About Communicating With Authorized Individuals of a Deceased's Estate
Debt collectors must refrain from unfair, deceptive, or abusive practices in violation of the FDCPA. In the context of collecting against a deceased'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."
Know Your Rights
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 deceased's estate is obligated to pay a debt, not spouses, children or other relatives, business associates or friends.
Contact Our Estate Administration Lawyers
For questions relating to the administration of an estate, collection of consumer and nonconsumer debts, bankruptcy, and other matters, please contact the attorneys at Cunningham & Chernicoff, in Harrisburg, Pennsylvania. You can also reach our firm by phone at 717-260-3527.