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Losing a family member is always a time of high stress and confusion. Many problems that arise are somewhat expected: a mountain of credit card debt typically catches grieving members of the family by surprise and without the slightest clue concerning how to handle creditors. Drop Debt Coach, Harvey Z. Warren states that even he was bewildered with this question.
Recently, a friend 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 large surprise - twenty-one credit cards by having an outstanding balance of approximately $110,000. The friend called Harvey in for some hands-on assistance to cleanup Edward's mess and set a stop towards the inevitable deluge of collection calls.
His first question was, "Are we responsible for Dad's debt?"
Surprisingly, the reply is, "Maybe yes, maybe no."
As the author of Drop Debt, Surviving Credit Card Hell Without Bankruptcy, you may figure Harvey would have a 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 understand should they ever face similar unfortunate circumstances.
The surviving children and their mother carefully gathered all their father's recent statements and the credit report. Point about this information was handy because Edward had read Harvey's book and knew that an organized, transparent and courteous method of creditors will often get you what you want. Their father had desired to settle all his debts without bankruptcy. Edward's sudden illness put a stop to his effort, although not an end to his plan.
Ironically, at the time Harvey sat down with the family to help make the calls, it might have been Edward's 68th birthday. They were nervous, dreading harsh positions from the creditors. After a five-hour marathon calling session several clear facts emerged:
Creditors are very courteous and careful with bereaved members of the family. Creditors have special programs to resolve debts of deceased customers. Resolutions can be achieved rapidly if you know what to ask for.
With twenty-one cards, Edward were built with a balance with only about every major credit card issuer. These were respectful and offered condolences.
Soon after calls they realized that the following script was all that was necessary to obtain the resolution started, "We are calling about a credit card holder who died a week ago. Would you please transfer us to the correct representative?"
Even before giving the name and account number of the deceased, they were used in either the "probate" or "estate" department. Several of the banks immediately disclosed that neither Edward's wife nor his children were responsible for the debts because they were not signers around the cards.
If the deceased may be the only one authorized to sign on the card, family members have no obligation to pay for the debt.
The reason that the banks have estate and probate departments is because they may - and Harvey emphasizes may - pursue the estate from the deceased to recuperate the outstanding balance or some part of it.
Edward had 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 wasn't any "estate" to allow 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 kids to accomplish and return the forms, suggesting that 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. Chances are that, with twenty-one cards, at some stage in the future, the debt will be accidentally sold to some third-party collector that will try to collect. Sending the entire 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 of the family, can you please immediately cease all collection activity and turn off the dialers to stop the collection calls." The last thing a household in mourning needs is to answer collection calls on the credit card debt that will not be due.
