According to the New York Times, when debt collectors call up grieving relatives of the deceased, those relatives often have no obligation to pay the debt. So when do relatives have a responsibility to pay the debts of the dearly departed?
Since I represent the living, I asked someone who deals with the dead (or, rather, their relatives). Jennifer Frantz handles estate planning and probate matters near Minneapolis, Minnesota. Here is what she had to say:
Generally, the creditors of a decedent have no right to collect from the heirs of the decedent. If the decedent died with little or no assets, the creditor will simply not be paid back. The heirs or those named in the decedent’s will are not responsible for the debt.
In order to collect a debt, the creditor would need to file a claim against the estate of the decedent, normally through the probate process. The creditor then will get in line to collect from the non-exempt estate assets. (Example: a homestead willed to a spouse would be an exempt asset and would pass to the spouse without being subject to the claims of the unsecured creditors.)
A creditor could collect from an heir if the heir was a co-signer on a debt of the decedent.
So creditors and debt collectors really have no business calling anyone but representatives of the estate.
If you are in Minnesota, contact The Glover Law Firm, LLC, for a free case evaluation. In any other state, you can find a consumer rights lawyer using the National Association of Consumer Advocates lawyer database.
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Thanks for the informative piece, Sam. :)
Having had a great aunt who died last year with significant medical bills as the result of a hospital stay(and no signifcant assets), and with my parents acting to settle matters of her estate(including a large bill with a major medical institution in Minnesota, ahem), it’s good to know about such things–both for that matter and for the future.
Some states make an exception with respect to certain types of debts, if there is a surviving spouse. For example, Minnesota Statutes Section 519.05 provides, in relevant part, as follows:
519.05 LIABILITY OF HUSBAND AND WIFE.
(a) A spouse is not liable to a creditor for any debts of the other spouse. Where husband and wife are living together, they shall be jointly and severally liable for necessary medical services that have been furnished to either spouse, and necessary household articles and supplies furnished to and used by the family. Notwithstanding this paragraph, in a proceeding under chapter 518 the court may apportion such debt between the spouses.