Bill collectors target debts of the dead
Posted
Mar 04 2009, 06:18 PM
by
Karen Datko
Rating:
Here's a new trend we can do without: Having trouble collecting bad debts from the living, bill-collection agencies are increasingly going after the debt of those who no longer share our space.
It appears to be working, says a story in The New York Times. Relatives of the deceased are scraping together payments -- when they are under no obligation to pay.
The story says: "The law varies from state to state, but generally survivors are 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."
MSN Money's Liz Pulliam Weston shines more light on the matter in an article called "When your parents die broke."
She writes that "children aren't on the hook for their parents' unsecured debts -- credit cards, personal loans, medical bills -- unless they had agreed to take on the responsibility" by co-signing a loan or being a joint account holder (as opposed to an authorized user) of a credit card. (The rules are different for debt that's secured by a house or a car.)
Generally, the deceased's debts may be paid if they left an estate that goes through probate. If they die penniless, that's that.
Not renowned for their charitable attitude, bill collectors are getting special training to talk to mourning relatives, who likely aren't expecting such calls. One firm, DCM Services of Minneapolis, calls it "empathic active listening." Another company will offer to transfer family members to a grief counselor if the call doesn't go over so well, the NYT story says.
The process is producing success -- most likely because of survivors' sense of duty to put a family member's obligations to rest.
We prefer this man's reaction. The NYT story says:
Eric Frenchman, an online consultant, said a DCM agent inquired about his late father's $50 Discover card balance before the bill was even due. Since Mr. Frenchman had been planning to pay it anyway, he emerged from the experience vowing never to get a Discover card himself.
Or, as Liz suggests, just hang up.
Feel free to sound off below or at a Your Money message board thread called "Readers talk: My mom passed away. Do we need to pay her debt?"
Related reading:
Steps you must take when someone dies
‘Zombie' debt is hard to kill
Executors can inherit an unholy mess
Sleazy new debt-collector tactics
