Thatcher Law Firm

Minneapolis estate planning attorney

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Thatcher Law Firm Helps You Find the Right Balance With Debt And Debt Collectors

 

Debt Collection from Deceased People:

Twin Cities Debt Collectors Are Becoming More Aggressive

During the recent recession it has become more common for people to be in debt when they die. Debt collectors are becoming more aggressive in trying to collect these debts from both family members of the decedent and from their probate estate. Many collection agencies and the law firms representing them call debtors to ask for payment of debt, and when they find out that the debtor is deceased, they ask family members to pay

 

One of the largest of such debt collectors is DCM Services LLC of Golden Valley, MN. Started by attorneys Gary Becker and James Balogh, and originally called Blogh Becker Ltd., it claims to be "the only collection agency in the U.S. focused exclusively on deceased accounts." See its website, www.dmcservices.com which indicates that it focuses on collecting from probate estates and has a large database to determine dates of death, probate court filings and time limits for making claims across the country. Other local law firms which attempt to collect from deceased debtors are Gurstel Chargo and Messerli & Kramer.

 

Many creditors and collection agencies do try to collect directly from family members. However, a family member is not necessarily liable for the debts of deceased relatives. Even a spouse is not always liable for debts of their spouse. Minnesota Statutes §519.05 provides that a spouse is not liable to a creditor for any debts of the other spouse except for necessary medical services or household articles and supplies used by the family. No one is liable for debts of their parents or children. Unless the debt is a joint debt or the survivor was a co-signer, debt is not transferred to a survivor.

 

The Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive, unfair or deceptive practices to collect debts. They cannot lie and state that a person is liable for the debts of another if they are not. They cannot threaten to take legal action or to seize assets unless they are permitted by law to do so. They cannot repeatedly call someone to annoy them or misrepresent the amount owed.

 

However, many debt collectors employ tactics developed to persuade grieving family members to pay, and rely on guilt or misinformation to get people to pay. The elderly are particularly vulnerable to these tactics and will pay just to stop the phone calls. Unfortunately, the spouses and other family members of decedents in debt are often also in poor financial condition and cannot afford to pay.

 

A family member who receives such a telephone call from a debt collector should give them the contact information for the personal representative of the decedent's estate, if any, and tell them not to call again. If the calls persist, they can send a certified letter telling them to stop contacting them.

 

Claims in Probate Court

A creditor may make a claim in a probate estate within 4 months of the date of the Notice of Creditors by mailing or delivering a written statement of the claim to the personal representative or to the probate court. This notice must be published in a legal newspaper in the county where the probate is commenced, and give the name and address of the Personal Representative. The personal representative must also mail this notice to all known creditors. Under Minn. Stat §524.3-801(c), which was revised in 2008, a creditor is known if "the claim of the creditor would be revealed by a reasonable diligent search for creditors of the decedent in accessible financial records known and available to the personal representative." A claim of a creditor with notice via publication or direct notice who does not make a claim within the 4 month period is barred. Certain liabilities of the decedent are not considered claims and do not have to be presented within the time period, including tort claims, taxes, liens against real property, funeral and medical expenses, and expenses of administration of the probate estate.

 

A personal representative who disagrees with the claim of a creditor must disallow the claim within two months after the expiration of the 4 month period to make a claim. If a claim is not timely disallowed, it is deemed to be allowed. A creditor whose claim is disallowed by contest the disallowance in probate court.

 

A personal representative who disagrees with the claim of a creditor must disallow the claim within two months after the expiration of the 4 month period to make a claim. If a claim is not timely disallowed, it is deemed to be allowed. A creditor whose claim is disallowed by contest the disallowance in probate court.

 

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