The Fair Debt Collection Practices Act
(FDCPA) is a federal statute established to protect debtors from debt collection harassment
. This Act is enforced by the FTC and private attorneys. Among other things, the FDCPA protects debtors form third-party debt collectors who may harass them if a loved one dies.
The FDCPA does not provide for the dead person's loved ones to be dragged into the payment of a debt unless they co-signed or otherwise guaranteed a loan, credit card, or other debt. If not, relatives are generally not responsible for a deceased family member's debt. According to the FTC
, a surviving relative usually has no legal obligation to pay the debts of a dead family member. In fact, the rights of surviving relatives are covered by the FDCPA
, which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from them.
Relatives of a deceased debtor are thus not obligated to repay debts owed by their relative. Unless a relative, like a spouse or children, co-signed, the debt is the deceased's and cannot be collected from the surviving family members. There are limited exceptions under certain circumstances when the spouse of the deceased might inherit the debt (for example in community states like Nevada, Alaska etc.), but this is not always the case. If you are contacted by a debt collector in such a situation, tell them that the person they are trying to reach is dead and that they should not contact you again. If you know the contact information of the deceased’s personal representative (the individual in charge of administering or executing the estate) then you should provide this to the debt collectors. If a debt collector persists in contacting you, send them a certified, return-receipt cease and desist letter advising the collector to stop all contact.
It is usual to pay off any debts through proceeds of the deceased's estate through the probate process. The probate process involves not only settling any debt, but also transferring any assets to beneficiaries. However, before any beneficiary can collect from the estate, all debt must be paid first. Probate courts handle the probate process, which includes notifying creditors that the borrower has died and taking inventory of his property.
Children who have lost both parents do not have to pay for the deceased's debt. But if children, a surviving spouse, or any other relatives have co-signed with the debtor, they will be held responsible for repaying the debt. If debt collectors harass the deceased's family of other relatives for the payment, however, regardless of whether they co-signed on the debt, such harassment violates the FDCPA.
Credit card companies and other debt collecting agencies
have the right to collect outstanding debt from the estate of the deceased, but Federal laws
protect all surviving family members from harassing debt collectors. If you are experiencing harassment from creditors after the death of a loved one, contact a debt collection attorney for assistance in stopping the harassment and returning to rebuilding your life.