If someone in your family died recently, you might get a call from someone trying to collect a debt your family member owed. Let's take a quick look at this practice.
General rules about debts owed by someone who died
• Creditors (those to whom the deceased owed money) can collect from the estate of the deceased if there is enough money to pay that debt. The creditor must file a timely claim against the estate.
• If the creditor isn't fully paid from the estate, the debt does not "pass on" to someone else.
• A creditor can ask a family member to pay that debt, but there is no "teeth" to that request.
• When someone calls and says something like "Is anyone in the family in a position to pay this?", you are entirely within your rights to tell them that you're not going to pay that deceased family member's debt. Note that these collection agencies train their people to be "nice" and understanding. You can still tell them "No".
• Creditors get paid from the estate before the heirs inherit anything. If the deceased had filed bankruptcy before death, those debts might have been eliminated with money remaining to be inherited upon death. This makes bankruptcy a valuable estate planning tool for many people. If you feel this might be true for you, contact an experienced bankruptcy attorney in your area.
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