Losing a family member is definitely a time period of high stress and confusion. Many problems that arise are somewhat expected: a mountain of credit debt typically catches grieving members of the family by surprise and with no slightest clue about how to handle creditors. Drop Debt Coach, Harvey Z. Warren says that even he was bewildered by this question.
Recently, a friend of his lost his father, let's call him Edward, unexpectedly at 67. After reviewing his father's affairs with his sister they faced a big surprise - twenty-one credit cards by having an outstanding balance of just over $110,000. The friend called Harvey set for some hands-on assistance to cleanup Edward's mess and set an end to the inevitable deluge of collection calls.
His first question was, "Are we on the hook for Dad's debt?"
Surprisingly, the answer is, "Maybe yes, maybe no."
As the author of Drop Debt, Surviving Charge card Hell Without Bankruptcy, you might figure Harvey might have a far more definite answer. In truth, for now, he'd only helped live clients. What he learned is intriguing and essential for every family member to understand should they ever face similar unfortunate circumstances.
The surviving children as well as their mother carefully gathered all their father's recent statements and his credit history. Much of this information was handy because Edward had read Harvey's book and knew that the organized, transparent and courteous method of bill collectors will frequently enable you to get what you want. Their father had wanted to settle all of his debts without bankruptcy. Edward's sudden illness stop his effort, although not a stop to his plan.
Ironically, at the time Harvey sat down with the family to help make the calls, it might have been Edward's 68th birthday. These were nervous, dreading harsh positions from the creditors. After a five-hour marathon calling session several clear facts emerged:
Creditors are very courteous and careful with bereaved family members. Creditors have special programs to solve debts of deceased customers. Resolutions can be accomplished rapidly if you know what to request.
With twenty-one cards, Edward were built with a balance with only about every major charge card issuer. These were respectful and offered condolences.
Soon after calls the team realized that the following script was all that was essential to get the resolution started, "We are calling in regards to a charge card holder who died last week. Would you please transfer us towards the correct representative?"
Even before giving the name and account number of the deceased, they were used in either the "probate" or "estate" department. Some of the banks immediately disclosed that neither Edward's wife nor his children were responsible for the debts as they weren't signers around the cards.
If the deceased may be the just one authorized to sign on the credit card, family members don't have any obligation to pay the debt.
Why banks have estate and probate departments is they may - and Harvey emphasizes may - pursue the estate from the deceased to recover the outstanding balance or some portion of it.
Edward have been ill for several months and all of his cards were delinquent and had incurred interest and penalty charges. All those charges were voluntarily reversed "in case" the probate or estate departments were inclined to try to collect the balances. Banks were informed there was no "estate" to allow them to lien or attach. They informed the children that there were some formalities covered in bereavement letters delivered to Edward's last known billing address. They asked the children to complete and return the forms, suggesting that this may likely conclude the matter and shut Edward's files.
The gathering business is sometimes an imprecise science. Harvey requested that every of the card issuers give a letter of full discharge for the children to put in their files. It is likely that, with twenty-one cards, at some stage in the future, your debt is going to be accidentally sold to a third-party collector which will attempt to collect. Sending the full discharge letter may be the simplest and fastest way to stop that improper activity.
One further note: make sure you the following words, "Out of respect for the privacy of the family, would you please immediately cease all collection activity and switch off the dialers to prevent the collection calls." The last thing a family in mourning needs is to answer collection calls on the credit debt that will never be due.