Your Dead? Sorry, but that won’t stop the debt collector
The New York Times ran a story this week on bill collectors who call relatives of the dear departed asking if they want to settle the balance on a credit card or bank loan, or perhaps make that final cable tv bill or cellphone payment for the deceased person.
The next of kin on the other end of the line often have no legal obligation to assume the debt of a spouse, sibling or parent. But they often pay for it anyway.
Dead people are the newest frontier in debt collecting, and one of the healthiest parts of the industry. Improved database technology is making it easier to discover when estates are opened in the country’s 3,000 probate courts, giving collectors an opportunity to file timely claims.
The law varies from state to state. In California, survivors are generally not required to pay a dead relative’s bills from their own assets. In theory, however, collection agencies could go after any property inherited from the deceased.
Sentiment also plays a large role, the agencies say. Some relatives are loyal to the credit card or bank in question. Some feel a strong sense of morality, that all debts should be paid. Most of all, people feel they are honoring the wishes of their loved ones.
It is likely that most of those who pay a dead relative’s debts are unaware they may have no legal obligation.
I think collections from the next of kin of deceased persons should be better regulated. I doubt survivors are told up front that they are under no legal obligation to pay the debt.
My recommendation: Unsecured creditors who want to seek payment for deceased persons’ debts should be required at beginning of call, to state that the survivor has no personal obligation to pay debt. They should also be required to state the only legal recourse the creditor has is against the debtor’s estate.
In my Orange County Probate practice I have seen many instances of family members paying bills for a deceased person from their own funds. Think twice before you do this. If there is a probate estate pending, notice is given to all creditors - they have 120 days to file a claim after the notice. If a creditor fails to file the claim with the court, the claim is barred.
If your in doubt about a collection claim against a deceased relative, call a probate attorney.
James D. Perry
