Debt collecting from the dead?
Posted on March 4th, 2009 – 4:21 PMBy Kara McGuire
That’s right. A company specializing in collecting money owed by the dead from widows and other relatives, much of which doesn’t need to be repaid, is based right here in “nice” Minnesota.
I was going to write a full post on the topic, which the NYT wrote about today, but consumer attorney Sam Glover beat me to it on his blog.
If you find yourself in this unfortunate situation, here is a list of questions to ask courtesy of creditcards.com, when a collector calls about a loved one’s credit card debt.
For general rules about debt collection, here’s a link to the Fair Debt Collection Practices Act.
I don’t have details on what circumstances would require a relative to pay off a loved one’s debts, but I’ m working on it. Glover just posted some info from an attorney specializing in this matter.
4 Responses to "Debt collecting from the dead?"
We were told when we did our exit interviews from college that student loan debt must always be repaid. I still remember the convener pounding into our heads that even if we die, someone in our family would have to pay it back. I assumed he was telling the truth — all I know is I finished mine early because he scared me so much.
I think they’d have to be a joint account holder. When I worked for Target in collections it was a total hands off/kid gloves procedure where we’d immediately stop collecting and offer our condolences, and refer it to our deceased department. We did need to be provided with a copy of the death certificate though I remember.
Regarding student loans…I recall that loans in the students name are forgiven if they die (a spouse or other family doesn’t have to repay) but if the parents took out a loan in their own names for the student’s education that was not forgiven. I had my parents as beneficiaries on my life insurance until they were done paying the loans they took out for me for that reason. Maybe I’m mistaken on the part about loans in the student’s name, but that’s what I remembered.
My brother-in-law’s mother racked up some credit card debt before she passed away. The collectors called my brother-in-law, but he just bluntly told them they weren’t too smart to let an elderly woman in poor health rack up debt. And then he hung up on them without regrets. That how to handle debt collector’s of this sort.
