There was a recent news article about a Seattle man happy to be alive after a long struggle with COVID-19.
Yet, after nearly losing the battle day after day for months – he stated what was “heart-stopping” was receiving his medical bill. A whopping $1.1 MILLION!
It’s not likely that he will owe all of that in the end, he is talking to his insurance company. Even after the write-offs and the coverage, that sounds like quite the bill.
So, what happens when someone has overwhelming debt (medical or otherwise) and they die? They aren’t there to see and respond to that “heart-stopping” statement?
Does a debt go away when the Debtor dies?
The simple answer is: No.
The Estate of the deceased person owes the debt.
But who or what is the Estate? That gets a little trickier. There may not even be one.
But you may be responsible if you co-signed for the debt, are a spouse and it is medical debt or legally responsible for resolving the estate and didn’t comply with state probate laws.
If you have any questions about your obligations regarding debt, give us a call. You should not just assume that you are responsible.
Who can Collectors talk to about Debtors debt?
Collectors may only contact third parties (such as other relatives) to get the name, address, and phone number of the deceased person’s spouse, executor, administrator, or other person authorized to pay the deceased’s debts. They shouldn’t be asking other questions or for money.
They can talk directly about the debt to the:
- Deceased person’s spouse
- Deceased person’s parent (if minor child)
- Deceased person’s guardian
- Executor or Administrator of Estate
- Any other person authorized to pay debts with assets from the Estate
What rights do Creditors have?
A debt collector is someone who regularly collects debts owed to others. You may hear from a collection agency, lawyer who collects debts on a regular basis, or company that buys delinquent debts and then tries to collect them.
They can speak with those authorized people in the above list about the debt.
They can make a debt claim against the estate as appropriate.
What rights do Relatives of Deceased have when there is debt?
- If you do not owe the debt, send the collector a letter disputing it.
- If you receive a validation notice then they may start contacting you again.
- If the collection becomes too much, you can request they stop contacting you; HOWEVER — that does not make the debt go away. You may be sued or reported to the credit bureau.
What if it becomes too much?
- If you no longer want to hear from the Creditor, write them and tell them to not contact you again.
- You can report additional problems with Creditors to the Attorney General’s office or FTC, both have Consumer Protection Divisions.
- You can get rid of this and other debt you’re liable on through a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy filing
If requesting “no contact” – make a copy of the letter for your file, send the original by certified mail and pay for a “return receipt.” Creditors cannot contact you again except to confirm no further contact or plans to take a specific action, like filing a lawsuit to collect the debt.
If you run in to issues with a Creditor contacting you when they should not or want to learn more about your rights as a Consumer here are some important sites:
If you are interested in getting rid of the debt and moving forward for good: