We have been working with an adult daughter whose 98-year-old mother has been in three hospitals and two rehab centers in the past two months and is not likely to leave the hospital. The mother has a small amount of debt, but even a small amount is a lot for this family. She, like many adult children, is grieving, having difficulty imagining life without her mother and concerned about paying the debt as she is 70 and on a limited income.
According to the Federal Trade Commission (FTC), one out of five Americans die with an average debt of $62,000. And for their grieving families, this can lead to additional difficulties at a very distressing time.
Who is responsible?
Often family members are not obligated to pay their loved one’s debt from their own assets as it is the loved one’s estate that is responsible. But there are certain cases where the loved one may be responsible. The most common cases are:
- Co-signed the loan
- Co-owner of a credit card (not applicable to “authorized users”)
- Live in a community property state (mostly in the West or Midwest)
- State law requires the spouse to pay a type of debt such as health care expenses (in Florida generally the debt of the spouse is their own and not the responsibility of the surviving spouse)
If you are receiving from the estate an asset such as a car or home, your asset may be encumbered but the debt doesn’t shift to you unless you agreed to be personally responsible. In the state of Florida if you are a personal representative your status does not make one responsible for the decedent’s debt.
How is the debt collected?
Once it has been established that you are responsible for the debt, debt collectors can contact you directly or can get your contact information from third parties including family members – but they cannot say anything about the debt to the third party. This process is in place so that a new payment system between you and the debt collectors can be established. All consumers – including family members – are protected by the federal Fair Debt Collection Practices Act (FDCPA) which prohibits debt collectors from using abusive, unfair or deceptive practices to try to collect a debt. You can choose to stop communications between you and the debt collectors while you are mourning, but the debt will still be your responsibility.
Important Step to Take
One of the most important steps to take is to analyze your loved one’s assets with appropriate legal representation. There may be hidden debts, also known as old debts that are attached to assets. These can further complicate the orderly distribution of the estate. Knowing your rights and responsibilities will help you to decide what best serves you and your family during this difficult time.
Whatever it takes, the Personal Affairs Management Group is here to make your life simple, reduce your stress and get things done. We specialize in helping all aspects of the day-to-day of busy professionals, families and seniors. We have a team devised to tackle and manage concerns that many may have. If you have questions or need information about you or your loved one’s life management issues, please reach out to us. We are here to make your life simple, secure and stress-free. Call us at 305-646-1833 or email at Corrine@mypersonalaffairsmanagement.com.
