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 family members unexpectedly and without the slightest clue concerning how to handle creditors. Drop Debt Coach, Harvey Z. Warren says that even he was bewildered by 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 together with his sister they faced a big surprise - twenty-one credit cards with an outstanding balance of just over $110,000. The friend called Harvey in for some hands-on help to clean up Edward's mess and put a stop to 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."
Because the author of Drop Debt, Surviving Charge card Hell Without Bankruptcy, you might figure Harvey would have a far more definite answer. In truth, until then, he had only helped live clients. What he learned is interesting and important for every family member to know should they ever face similar unfortunate circumstances.
The surviving children as well as their mother carefully gathered all their father's recent statements and the credit history. Much of this information was handy because Edward had read Harvey's book and knew that the organized, transparent and courteous approach to creditors will often get you what you want. Their father had wanted to settle all his debts without bankruptcy. Edward's sudden illness stop his effort, but not a stop to his plan.
Ironically, at the time Harvey sat down with the family to help make the calls, it would have been Edward's 68th birthday. These were nervous, dreading harsh positions in the creditors. Following 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 achieved rapidly if you know things 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 they realized 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. Can you please transfer us towards the correct representative?"
Before giving the name and account number of the deceased, they were transferred to 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 on the cards.
If the deceased is the just one authorized to sign on the credit card, members of the family have no obligation to pay for your debt.
The reason that 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 part of it.
Edward have been ill for several months and every one of his cards were delinquent and had 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. The banks were informed that there was no "estate" for them to lien or attach. They informed the children there were some formalities covered in bereavement letters delivered to Edward's last known billing address. They asked the children to accomplish and return the forms, suggesting this may likely conclude the matter and shut Edward's files.
The collection business is sometimes an imprecise science. Harvey requested that each from 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 some third-party collector that will attempt to collect. Sending the full discharge letter may be the simplest and fastest method to stop that improper activity.
One further note: make sure you say the following words, "Out of respect for that privacy from the family, would you please immediately cease all collection activity and turn from the dialers to prevent the gathering calls." The very last thing a family in mourning needs is to answer collection calls on a credit card debt that will not be due.