Estate anguish - Debt Collectors eight months after death (relative, years, payments)
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More to follow as I learn more. Two letters received today from the same out-of-state Debt Collection Agency. The two letters received on same day makes me suspect they purchased the debt of the two BoA credit cards my sister had at time of death.
I 'believe' Michigan Law places unsecured debt, such as CC's, in the last of the seven categories of debt for payment by an estate. My sister's estate was insolvent with just the Category 1 debt!
Was the estate probated? IME there's a specified period of time within which a creditor can present a claim for payment. If they didn't do that, they're SOL. All it may take is sending the collection agency a copy of the court decree declaring the estate insolvent, but every state is different. You may not even need the attorney to find this out OP.
It's my understanding cc debt is not collectable after death. Could be wrong and of course varies by state.
It doesn’t matter if the debt is collectible, if the estate affirms their claims in any way, or even if it does does nothing, these SOBs can go to court and get a default judgement.
More to follow as I learn more. Two letters received today from the same out-of-state Debt Collection Agency. The two letters received on same day makes me suspect they purchased the debt of the two BoA credit cards my sister had at time of death.
I 'believe' Michigan Law places unsecured debt, such as CC's, in the last of the seven categories of debt for payment by an estate. My sister's estate was insolvent with just the Category 1 debt!
Call to the Attorney tomorrow. Crap!
Two things, Roger.
1) if her estate was insolvent relatively immediately, you can simply notify them the estate owed more debts than assets it had, was insolvent on X date, and to expect absolutely zero. Also notify them they may only contact the estate via USPS mail.
2) your state may be different, but in my state, when settling my FILs estate, we learned we had to wait 7 months for any and all final bills or debts to come in. Beyond that, was time for payments to go out, and no bill submitted after the 7 mos not even have to acknowledge it. (Yes FILs attorney provided that info)
You might be right, BOA may have immediately sold the debt to get something, rather than nothing, out of her estate...and foisted it upon the collection agency, knowing it would never be collected.
It's nearly 2 full years after his death (FILs), and his estate is STILL not settled completely.
Was the estate probated? IME there's a specified period of time within which a creditor can present a claim for payment. If they didn't do that, they're SOL. All it may take is sending the collection agency a copy of the court decree declaring the estate insolvent, but every state is different. You may not even need the attorney to find this out OP.
Not Probated because of a strange wrinkle in the State laws. There are three levels of Probate in Michigan per my review of the statutes.
▪︎ Standard Probate
▪︎ Probate Light if estate value is below a specified limit
▪︎ No Probate if there are no assets or very few assets to distribute. (clear definition is lacking, but example used by the State is one automobile).
My sister's estate would fall into the final category as she had no assets in her name after payment of her Final Expenses. Actually, she didn't have enough funds to cover those costs, so my younger sister and I paid her final expenses.
All personal property was sold during the final stages of her illnesses, prior to her death, to pay her SNF co-pays.
I already went thru this same battle with Medicaid six months ago to prove there was nothing which could be Recaptured to reimburse the State or Feds for her 5 months of SNF costs.
Not Probated because of a strange wrinkle in the State laws. There are three levels of Probate in Michigan per my review of the statutes.
▪︎ Standard Probate
▪︎ Probate Light if estate value is below a specified limit
▪︎ No Probate if there are no assets or very few assets to distribute. (clear definition is lacking, but example used by the State is one automobile).
My sister's estate would fall into the final category as she had no assets in her name after payment of her Final Expenses. Actually, she didn't have enough funds to cover those costs, so my younger sister and I paid her final expenses.
All personal property was sold during the final stages of her illnesses, prior to her death, to pay her SNF co-pays.
So what's the problem? There's nothing for the creditors to get. Why waste more money on an attorney? Why are you stressing and laboring to prove anything to anybody?
So what's the problem? There's nothing for the creditors to get. Why waste more money on an attorney? Why are you stressing and laboring to prove anything to anybody?
Exactly right. This is a nonissue. They can't go after the dead. The heirs have zero responsibility for her debts. My sister's estate was not insolvent. Even so, every creditor except the mortgagee, settled for 50c on the dollar - they initiated the offers. Yeah, it's a PITA to deal with the process, but tough luck to the creditors if they come up short.
Since you already have an attorney, it is my official advice to follow your attorney's advice. They have more, and direct experience here, and that is what you are paying for.
I dont know the laws in your state. In my state, there is a very specific time period for creditors with claims against the estate, to register their claim with the court. If they never file, if they miss the deadline, if they wont spend the time and hire an attorney to represent them in court, tough cookies they get NOTHING and that's the law in my state. Once probate is closed, there is no more "estate".
You protect the estate by ceasing US Postal Mail delivery to the deceased address. You can't call the deceased on the phone. You can't send them letters. And you may not even have permission to open their mail. The creditors can show up court in front of the judge, otherwise the door is closed and they dont exist. Thems the rules.
"receiving a strongly worded letter" saying "the deceased owes us this money!" is just a form of social engineering. They trying to "convince" you to pay, or settle. But I learned you only do what the judge says to do.
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