A 2016 study determined that 73% of Americans are going to die in debt. The study was done by Experian, one of the three largest credit bureaus in the U.S., and it revealed that the average American dies owing a substantial amount of money.
Types of Debt
A debt is an amount of money or obligation owed to a third party usually paid with interest at an agreed time. Usually and most at times, there are about two types of debt when it comes to debt collection.
- Individual debts: which are debts in the deceased name and can be paid off out of the estate of the deceased. What cannot be paid off is written off. It is imperative to note that nobody is liable to pay off unpaid debts out of their personal pockets unless they have provided a personal guarantee. A personal credit card with an outstanding unpaid balance is an example of individual debt.
- Joint debt: If two or more people have taken out a loan in their names, in most situations the outstanding debt will pass in full to the surviving people who took out the loan. A joint mortgage and a joint current account with an overdraft are examples of joint debt.
How to Collect Debt from a Deceased Person.
When someone dies, their debts become a liability on their estate. The executor of the estate, or the administrator (if no Will has been left) is responsible for paying any outstanding debts from the estate. If there is insufficient money or assets in the estate to pay off all the debts, then the debts would be paid in priority order until the money or assets run out. Any remaining debts are likely to be written off. If no estate is left, then there is no money to pay off the debts and the debts will usually die with them. Surviving relatives will not usually be responsible for paying off any outstanding debts, unless they acted as a guarantor or are a co-signatory of the debt.
Is the family or beneficiaries of the Deceased responsible for Debts left by the deceased?
Relatives are not responsible for the deceased member’s debt, unless they co-signed for a loan, credit card, have joint ownership of a property or business or live in one of the nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The rest of the debt obligations fall to the deceased person’s estate (if there is one).
Are Debt Collection Agencies calling you over a deceased person’s Debt?
If you are being contacted or harassed over the debt of a deceased person, you have rights and we can help you fight for them. Call a qualified lawyer on (877) 700-5790.