Collection agencies can attempt to collect debts after your death. When you die, the assets you leave behind become your estate. Collection agencies can be paid from your estate if there's enough money to cover the debts. If there's not enough money, collection agencies can't collect unless the debt is shared by someone else.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act protects consumers from being mistreated by collection agencies. Collection agencies can't call at odd times and they can't threaten or harass you. The act also protects consumer privacy, even after death. A collection agency can contact immediate family regarding who is responsible for the debt, but can't discuss the nature of the debt with anyone who isn't directly responsible for it. If there is a lawyer representing the estate or other responsible party, the collection agency is required to speak with them and not continue to contact other parties.
Determining Responsibility
Collection agencies can speak to the party responsible for the debt they're attempting to collect. Credit cards and other bills in collections are the responsibility of the estate, and only the estate, if there aren't any co-signers on the account, if the deceased was single or if the deceased was married in a non-community property state. Co-signers are responsible for any debt they co-signed if the debt can't be paid by the estate. Spouses are responsible, even if they didn't co-sign, for any debt accumulated during marriage if they live in a community property state and the estate can't cover the debt. The community property states are: Alaska (if the couple opts for community property), California, New Mexico, Texas, Washington, Wisconsin, Arizona, Idaho, Louisiana and Nevada.
Dealing With Collection Agencies
If you're the responsible party for a debt after the original debtor dies, you may want to speak with the collection agency once to set up a payment plan. If you don't want to communicate by phone, write a letter to the agency and mail it using certified mail. You can ask the agency to stop contacting you by mail, and you can also propose a repayment plan by mail. Don't commit to a repayment plan that's more than you can afford. If a collection agency is harassing or otherwise mistreating you, contact the office of your state attorney general and the Federal Trade Commission to report the agency.
Government Student Loans
Student loans aren't subject to collections after death. Federal government student loans are canceled if the borrower dies. You provide the student loan servicer with a certified copy of the death certificate and, once the servicer receives the copy, the loan is discharged. Private student loan providers aren't required to discharge loans if the borrower dies, but many do. Contact your loan provider for information if you don't know the type of student loan.
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