Losing a family member is always a time period of high stress and confusion. Many problems that arise are somewhat expected: a mountain of credit debt typically catches grieving family members unexpectedly and with no slightest clue about how to handle creditors. Drop Debt Coach, Harvey Z. Warren says that even he was bewildered with this question.
Recently, a buddy of his lost his father, let's call him up 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 approximately $110,000. The friend called Harvey in for some hands-on help to cleanup Edward's mess and set an end towards the inevitable deluge of collection calls.
His first question was, "Are we responsible for Dad's debt?"
Surprisingly, the answer is, "Maybe yes, maybe no."
As the author of Drop Debt, Surviving Credit Card Hell Without Bankruptcy, you might figure Harvey would have a far more definite answer. In truth, until then, he'd only helped live clients. What he learned is interesting and essential for families member to know should they ever face similar unfortunate circumstances.
The surviving children and their mother carefully gathered all of 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 an organized, transparent and courteous method of bill collectors will frequently get you what you want. Their father had wanted to settle all of his debts without bankruptcy. Edward's sudden illness put a stop to his effort, but not an end to his plan.
Ironically, on the day Harvey sat down with the family to help make the calls, it might happen to be Edward's 68th birthday. They were nervous, dreading harsh positions from the creditors. Following a five-hour marathon calling session several clear facts emerged:
Creditors are very courteous and careful with bereaved members of the family. Creditors have particular programs to solve debts of deceased customers. Resolutions can be achieved rapidly knowing what to ask for.
With twenty-one cards, Edward had a balance with only about every major charge card issuer. All of them were respectful and offered condolences.
Soon after calls they remarked that the following script was everything was essential to obtain the resolution started, "We are calling in regards to a credit card holder who died a week ago. Would you please transfer us to the correct representative?"
Before giving the name and account number of the deceased, these were used in either the "probate" or "estate" department. Several of the banks immediately disclosed that neither Edward's wife nor his children were accountable for the invoices because they were not signers on the cards.
If the deceased is the just one authorized to sign up the card, members of the family have no obligation to pay your debt.
The reason that banks have estate and probate departments is they may - and Harvey emphasizes may - pursue the estate of the deceased to recover the outstanding balance or some part of it.
Edward have been ill for several months and every one of his cards were delinquent coupled with incurred interest and penalty charges. All of those charges were voluntarily reversed "in case" the probate or estate departments were inclined to try and collect the balances. Banks were informed that there was no "estate" to allow them to lien or attach. They informed the kids there were some formalities covered in bereavement letters sent 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 close Edward's files.
The collection business is sometimes an imprecise science. Harvey requested that each from the card providers give a letter of full discharge for him or her to set up their files. Chances are that, with twenty-one cards, at some stage in the long run, the debt is going to be accidentally sold to some third-party collector that will try to collect. Sending the full discharge letter is the simplest and fastest way to stop that improper activity.
One further note: be sure you the following words, "Out of respect for the privacy of the family, would you please immediately cease all collection activity and turn from the dialers to prevent the collection calls." The very last thing a family in mourning needs would be to answer collection calls on a credit debt that will never be due.