When the appropriate legal response is: "NAME is deceased, here is the contact info the for executor of the estate".
If the executor of the estate runs out of funds from that estate, the company will usually just write off the debt or they might go to court to make sure, but then write off the debt. The inheritor never pays the debt of the deceased.
If the estate has debt but no assets (which is quite common given probate-avoiding estate planning tools like joint accounts and contract beneficiaries), then such payments are a straight up waste.
Unnecessarily paying off a decedent's debts may still be in line with the decedent's life philosophy and wishes, but one certainly shouldn't be goaded into doing so due to harassment from creditors at an already emotional and stressful time.
I'd recommend reading the Fair Debt Collection Practices Act.
https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-...
In Australia (if they show Tricky Business is at all realistic), Mercantile agents can't present you with a notice in front of other people and must serve you in person (similar to a legal summons in the US).
So there are _some_ regulations in place.
You may not have known that the car you are driving is not paid in full. Large assets can be repo'ed if the account that paid for them is in arrears. This is not necessarily going to happen right away, the estate may have accounted for this already, there are plenty of reasons why this contact is bogus, but it could also be possibly in your interest to follow up with payments in certain cases. (Fight me?)
You could give the car back to the estate (probably the right answer?), or argue that it was a gift, and the estate should pay for it, but I don't know if either of those arguments will actually get you anywhere / prevent the car from being repossessed. You might have documentation that it was a gift, but there's also a lien on the title. Your gift might have been smaller than a car, there's no title, and you might not have any documentation of the gift. (I'm not sure if it matters that you can prove it was meant to be a gift.)
It's probably not considered harassment or illegitimate on about the same basis that you can be newly considered responsible for your own debts that are "past the statute of limitations" that you have started payments on again, even if your last contact was some time after the statute of limitations had already expired.
At that point the debt collectors can continue contacting you, but the collection efforts must include language that explains the fact that you can't be sued for these debts. Well, what they don't explain is that by making a payment, you could be resetting the statute of limitations and newly assuming responsibility for the whole debt, with a brand new expiry date. (I am not a lawyer and this is not legal advice, but this is my understanding of why you "just don't answer those letters.")
You wouldn't have started making payments if you didn't feel that you ought to be responsible for the debt, "QED." Not saying it's fair or right, but there are cases where that's what the law assumes and approximately why it is so.
There are also a lot of things that collectors can do, that would easily be considered harassment if you simply asked them to stop (and then they persisted anyway). People don't always ask, or know that they should ask. Especially if they don't want to pay! (Whether or not responsible, it rightfully makes people go on the defensive to receive a contact from a bill collector.)
I'm getting downvoted but nobody is telling me if I've said something incorrect. That "disagree" button...
So it could be repossessed. (Through the estate, right?). Never mind it's probably much harder without a clear title. Nobody gets a pass to buy free stuff with their credit cards before they die. It's just harder to repo in many cases.
(Jewelery given to your children is also likely much easier to trace and repossess, than the example of a sandwich given to a random homeless friend.)
While they don't "get a pass", this is something that happens - credit-givers know this and the risk is baked into the price and amortized over the entire card-holding population. A lot of people have delinquent debt and some choose to declare bankruptcy.
How do you repossess an expensive luxury cruise, or a stay in Vegas? Some debt is just written off.
the ownership can be called into question if that card wasn't paid off before the person responsible died
On what legal basis?
If the estate does not have the money to pay the debt, the estate would be liquidated to cover as much as possible and the creditors get theirs before you get yours.
If there is documentation to support that they did this on purpose, with the intention of defrauding the card issuers so that you can have some kind of inheritance, then what will happen?
(I've never lived through this scenario but I have to imagine they'll have some recourse against you or the estate. I don't know everything about the law but I know enough to believe that the answer is not "you get to keep any ill-gotten spoils of the scheme, and simply get away with it.")
If the dead person owned a ring when they died then it's an asset that can't be passed on until after debts where paid. However, the estate can sell the ring which they still own for what it's currently worth without issue. They just can't give anyone assets until debts are paid.
This opens up something of a loophole where family can purchase items of a sentimental nature which are not actually worth much on the open market.
That seems like not much of a loophole, are you saying for tax purposes? Since the assessed value of a gift might be much higher than the actual purchase price at auction...?
The loophole seems to be that they can give the gift when their estate is insolvent, if any loophole exists. (Not saying you're wrong, or that this loophole is wrong.)
Or are you saying, it's a loophole because they couldn't normally get those precious things from the estate if it was insolvent, except that their value is mostly sentimental, so they can actually be purchased for a pittance at the inevitable estate auction?
This, the estate can't give things away so normally someone would need to payoff or assume debts to get such things. However, if the sentimental value is high on grandma's rocking chair, but it's actual value is low then family can still get it cheap even if it's not free.
For example, if your parent is past retirement age and has a sizeable nest-egg, which you've transferred into your own name with their permission, and then considered as yours, knowing that you are the executor and they are assets that are assigned to you in the will... call it a "trust" because your parent trusts you, maybe with Power of Attorney...
Well, this might be legal in and of itself (I don't know specifically), but maybe it's actually not legal if you failed to document it properly. There are limits to the amount that you can gift without paying taxes. Was it a gift, or is it a trust? It might matter for tax reasons, or estate settlement reasons, or both.
And one more reason that it would need to be carefully documented, even if you can legally do this is: say that your parent needs nursing care in their final days, and on paper they are flat broke. But actually this trust exists. Well, if it wasn't a crime before, to make the transfer in trust without proper documentation, it certainly becomes a crime now if they apply for medicare benefits to keep the nursing homes from "getting their hands on that money," that's medicare fraud and it's very serious.
That's also pretty far from the original topic, but it's not as far as it might seem. There can be cases where something would have flown under the radar even if it was illegal, but now there is an estate involved, and those things are going to come to light as a result.
If there is a major credit card debt and there are no assets in the estate that can pay for it, then it seems likely that there will be more questions after that. "Are there any hidden assets" can be one of those questions, and there's certainly a spectrum of answers that varies according to whether those assets might be in the form of a gifted sandwich / some jewelry / a car / a boat, etc. and whether those gifts were legitimate or fraudulent.
It will be very hard to get the assets back, but who knows... it might be pretty easy to nail someone with a fraud charge if it was fraud and they were sloppy.
Assuming you could talk a lender into taking the risk, I see no reason you couldn't get an unsecured loan for a car. Obviously, you could put up collateral to secure any sort of loan too.
What if I took out a payment plan to buy a sandwich, gave the sandwich to a homeless man, and then died without finishing all the payments? You say the homeless man should be obligated to give up the sandwich??
If the dealer has a lien against the title of the car, then yes, you give back that car when the order to repossess is issued.
You think the lien is cleared because the debtor passed away? It doesn't work like that. The ownership of the car is based on a transfer of title, and though you may be driving the car, possession is "only 9/10" of the law. If the title is not in your name, then it is not your car. You're just driving it.
Such cases I'm fairly certain that it's actually the title that says who owns the car. If you gave a homeless man a sandwich, paid for with a credit card, and then you died owing money on that card, then yes, that man probably has clear title to keep the sandwich.
(But hypothetically if you do, and it was simply processed as a regular card transaction, would the credit card company potentially have any claim on the title?)
I did not know the difference between a secured and an unsecured loan and that explains a lot. Cases of fraud or bankruptcy are really what I'm mainly talking about.
In most cases where the actual estate is not in the red, the estate will pay the debt and nothing should get repo'ed. If there were a lot of gifts made and cash transferred shortly before the person died, and now the estate is broke, then someone from the creditors' side is likely to seek more information about it, and exercise clawback opportunities.
2) This took place in the UK. (She owed £3,200).
3) The notice was sent to her, not her family.
4) It seems like she had a credit card with PayPal that had a balance on it (reference to "PayPal Credit"). Doesn't payment to creditors come out of the estate? So it seems PayPal might be legitimately owed if the estate has money. Thus there were no social engineering tactics
They're not that either, but I think you meant rogue.
That's not a reasonable assumption in my view. Why should a widow(er) be prevented from opening their late spouse's mail, even if the executor is another person (say, their lawyer)? Should all mail be passed unopened?
This is also done in cases where the collection agency may be aware that there is a "no getting blood from a stone" scenario of an estate that will have zero value when it is wrapped up, so guilt trip techniques are employed against any reachable family members to attempt to get them to assume payments.
I can’t think of any of my assets that will go through the estate. Our house, cars, life insurance [1], retirement [2] etc. are all either jointly owned or my wife is the beneficiary
Debtors won’t be able to collect anything from “our estate”. Until we both pass.
[1] https://finance.zacks.com/can-life-insurance-proceeds-paid-b...
[2] https://www.thebalance.com/does-an-ira-or-401-k-be-used-to-p...