Losing a loved one is definitely one of life’s biggest hardships, whether it’s a parent, spouse, or child.  While going through the mourning process and funeral arrangements, the last thing those left behind want to deal with is an angry debt collector calling trying to collect an outstanding debt from a loved one.  Many Americans do not know the policies in place when it comes to debt collectors.  Debt collectors can persuade family members to pay the loved one’s debt even though family members may not have to pay it.  This article discusses the different polices regarding debt collection after death.

Fair Debt Collection Practices Act

To break things down, there are two levels on which debts are collected.  Many debts are handled at the state level.  This includes what outstanding debts are to be collected after a loved one passes away and which property is allowed to have a claim against it with creditors.  Most debt collectors are concerned with the federal level since the enactment of the Fair Debt Collection Practices Act (FDCPA).  15 U.S.C. §§ 1692.

The FDCPA was in enacted in 1978 by the Federal Trade Commission (FTC).  This is a federal act that applies to what debt collectors are not allowed to do in collecting a debt, including the protocol after one’s death.  After the FTC went public with its plan to create a policy statement, it received over 100 comments ranging from many pro-family establishments such as AARP.  The FDCPA is meant to protect the debtor or person who is being harmed by a debt collector.  If debt collectors violate the FDCPA, actual and statutory damages can range up to $1,000.  That’s not the only price they would have to pay if the case holds up.  Debt collectors also have to pay the plaintiff’s attorney fees.

Some examples of the FDCPA’s protections include prohibiting debt collectors from calling during unusual hours of the day, using inappropriate language, misrepresenting the debt, or to using public humiliation.  The FDCPA also informs the public of the procedures of suing a debtor in a different jurisdiction from where the debtor lives.  See the act in its entirety by visiting   https://www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm.

Debt Collection Restrictions

 Who debt collectors can and cannot talk to creates a considerable restriction on their communications process.  When dealing with the death of the debtor, the debt collector must deal with the personal representative handling the estate.  Debt collectors are also allowed to talk to the spouse or surviving parents (if decedent was a child).  If a debt collector chooses to call another party, they can only call that party once for information pertaining to the location of the personal representative.  If a debt collector informs the caller that they are a debt collector pursing a debt of the decedent, they have also violated the FDCPA.  A good way to distance a debt collector from the debtor’s family is to have the debt collector contact the family attorney or send a letter to the debt-collecting agency to stop communications.  If the debt-collecting agency refuses to abide by these restrictions, they expose themselves to the remedies of statutory damages and paying all attorney fees.

Allowable Practices by Debt Collectors

Debt collectors are allowed to locate the personal representative of the estate by informing a third party that they are calling in regards to “outstanding bills” and wish to speak to the person in charge of the estate.  Informing anyone that the decedent has defaulted on payments is not allowed.  The debt collector cannot mail any material to the decedent’s former address or to the personal representative.  Letters with the verbiage of “The Estate of X” or “The Administrator of the Estate of X,” are not allowed.

Debt collectors are known to pressure individuals to pay the decedent’s debts.  One thing that many people do not realize is that the FTC has created two possible disclosures.  The first is that the collector is seeking payment from the assets in the decedent’s estate and second, the individual could not be required to use the individual’s assets or assets the individual owned jointly with the decedent to pay the decedent’s debt.

There is no time limit as to when a debt collector can start the collection process after death.  That is, the collector can start immediately upon death and not allow the family the proper time period during which to mourn.  The FTC does discourage against this by urging collectors that it is unusual and inconvenient.  However, if a collector calls during a wake while attending a place of worship, the FTC states that this would generally be a violation.  Once a personal representative or administrator takes a call from a collector, the collector must also use the same disclosures when communicating throughout the communication history.

Being Abused by Debt Collectors is Common

Being called by a debt collector after a loved one passes is something that happens quite often.  Debt collectors try to instill fear into family members accusing them of being personally liable.  These cases can be brought into court under the FDCPA.  Bringing a FDCPA claim creates a sense of ethical uncertainty for the debt collector. Very rarely do debt collectors file counterclaims.  Rather, it is common to workout some agreement or settlement in these cases.

The Importance of Finding an Experienced Attorney to Pursue a Claim

Finding an attorney experienced in this type of law is crucial.  Hiring an attorney that does not have experience in this area would create a longer process due to research that needs to be done by the attorney.  We at Dillman & Associates are experienced in meeting your every need in this area.  We focus on serving our clients with professionalism and care.  Call today if you have been a victim of a debt collector after the passing of a loved one.