When a loved one dies, many decisions must be made: “When should the funeral take place?” and “Where should the burial site be?” are two of the most common questions presented. One question that rarely surfaces during this time is “What happens to their debt?” and rightfully so. It is natural to have a grieving period before addressing such issues, but it is vital that you do discuss them as soon as possible.
Many people falsely believe that your debt dies with you, but that is the furthest from the truth. There are numerous factors at play that determine whether a debt gets passed on to another individual and what happens to the assets of the deceased. Here are four things to know about debt after death.
Redirect Creditors to the Executor
When an individual dies, their estate begins. Per the will of the deceased and after court affirmation, an executor is designated to the estate, granting him or her the authority to manage the deceased’s financial issues. If you receive calls from creditors and debt collectors, redirect them to the executor and express that you wish not to be contacted again regarding that account.
The executor is responsible for notifying creditors and lenders of the death. This individual must also inform Experian, TransUnion, and Equifax (the three major credit reporting agencies) to flag the account. This can help prevent identity theft.
Halt the Use of Credit Accounts
It is vital that you stop using any credit accounts for which the deceased was the primary cardholder. Even if he or she had you as an authorized user on the account, you can no longer incur charges on the account after he or she passes. The reason for this is that you are not personally responsible for paying off the balance. The court can see such actions as fraudulent which can result in severe criminal penalties.
Discover Who’s Responsible
While family, spouses, and heirs may be able to inherit valuables, they do not inherit debt. As mentioned earlier, the executor is responsible for such issues; however, there are situations where someone else may be responsible for debt after an individual on the account dies.
Anyone who is a co-signer on the account or requested the credit with the individual will be responsible for the remaining debt. The executor plays no role in these instances, and debt collectors can rightfully contact you regarding funds owed.
Wait Before Distributing Assets
It is natural to start divvying up the assets of an individual after he or she passes, especially in instances where that person didn’t leave a will behind, but you should always wait before doing so. The estate includes the possessions of the individual who passed which is used to fulfill the remaining balance of pre-existing debts. Heirs who collect the assets, preventing the estate from satisfying debt accounts, may become personally responsible for the debt.
When the death of a loved one results in unrelenting debt collection calls, reach out to the Florida TCPA and FDCPA attorneys at The Law Offices of Jibrael S. Hindi. We can get you up to $1,000 per FDCPA violation and $1,500 per TCPA violation. Contact us today for a free case evaluation and to discuss your legal options.