Debt Collection after Death

While debt collection calls can be annoying and confusing at any time, they may be especially so after the loss of a loved one. When a person dies, many of his or her debts may remain outstanding. Thus, creditors and debt collectors still have a right to have those debts paid, often out of the assets of the deceased’s estate. Further, in some instances, a spouse or other relative may remain personally liable on certain of the deceased’s debts. The FTC has issued a Consumer Alert regarding who is responsible for paying the debts of a deceased relative, which can be located at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt004.shtm.

The Fair Debt Collection Practices Act governs all calls by debt collectors—including those regarding deceased debtors. However, the FTC recently issued a policy statement clarifying the requirements of debt collectors attempting to collect a deceased’s debts. Problems commonly arise when debt collectors contact persons with no legal obligation or no authority to pay the debt out of the decedent’s estate and mislead those persons about their obligations. By engaging in this type of deceptive conduct, the debt collectors could be violating the FDCPA.

According to the FTC, a limitation of permissible contact provides additional protection for the family against deceptive and abusive collection conduct. The FTC instructs that debt collectors should only contact certain individuals regarding a deceased’s debts—including among others, the deceased consumer’s attorney, spouse, parent (if the deceased consumer was a minor), guardian, executor, administrator, or any other individual who has the authority to pay debts out of the deceased’s estate. The FTC also encourages collectors to make good faith efforts to search probate court records before contacting people other than the deceased estate’s executors or administrators. Moreover, once a collector identifies the executor or administrator, the collector must only communicate about the deceased’s debts with that individual or any of the other permissible individuals.

Additionally, when communicating with permissible individuals, a debt collector may make a reference to payment for “outstanding bills” of the deceased, but implying that the deceased was delinquent on those bills may violate the FDCPA. The full FTC Policy Statement can be located in a hyperlink at the following webpage, http://www.ftc.gov/opa/2011/07/fdcpa.shtm

In additional to the contact limitations imposed by the FTC, the FDCPA’s general prohibitions on misleading, deceptive, harassing or abusive contacts still apply to calls regarding a deceased’s debts. An attorney can help you determine whether calls regarding a deceased loved one’s debt are proper under the FDCPA. -Meredith Phillips (205)912-8244
Blankenship Harrelson, LLP