retmar

Questions To Help My Daughter

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For those who recall, I announced one of my daughter's lost her husband in 2009, just before Christmas. Today she is being harassed by some different CA/JDB/ATTY's regarding some accounts he had.

I know that in California, being a community property state, we face some hurdles in resolving this the one CC account. It is being handled by Allied and one of their assignees. Yes, we oldtimers know them quite well. I'm more than likely going to attack them by their only calling, no written letters, though they claim to have sent one. Here it must be understood she is at same address with same phone number, which they have. Yep, you guessed my opinion quite well. I'll keep all updated as we move along.

My biggest question for everyone involves accounts he opened without telling her, such as magazines, and her name appears nowhere. I seem to remember we had one of these ordeals some time back, but, cannot recall what we found to be true, or actionable. She did pay a magazine claim of $41.00, as the CA scared her with threats. Yep, she is pulling her info and sending it to me as I intend to have some fun. And, yes, I asked her why she paid without talking to me first. Yep, expected answers. Everything normal.

Therefore, if any of you can recall that incident, or have knowledge of how to best approach this, please share with me.

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I also believe if there was notice in the paper about the death then the debt collectors have something like 60-90 days(I am not sure what the time is) to bring the debt to the executor. if the time is up then they are SOL(not statute of limitations:)).

look into the probate statutes for debts. I believe california is a seperate credit and bills state.

I know that after someone passes away debts are supposed to pass away also.

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Thanks for the response. I'll see what I can find and share. California is a community property state, but, have heard numerous claims on this very issue, some that the widow/er is still liable, and others not.

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OK, I may not know what I'm talking about, but...

I think Seadragon in on the right track.

It doesn't matter that California is a community property state. You are still allowed to have separate debt. Whether it's a credit card, a magazine subscription, or a car loan, if she didn't sign for it, she's not liable - not directly.

I think they have to make a claim against the estate. As your daughter is probably the inheritor of the estate, she may have to make good on the debts in the end, but it's a different process than regular debt collection.

I would respond with a letter that the person they are looking for is deceased, and send a copy of the death certificate. Then let them figure out how they can get paid from the estate.

Good luck,

DH

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debtor,

She already did that and was told she was liable no matter what. This is when she finally told me of the problem. She did not want me to know so held off telling me. As it is, she paid a $41 claim for a magazine subscription he ordered using her name. Yes, I did "talk" to her about this. For now she is going to tell them to "go away" until I can get all of the particulars I need to take the next step. I'm waiting for my friend to get back so we can go over this. I know he handled a few for his clients in like situations. Personally, this is my first time helping with a situation like this.

What is slowing me down to send them C&D's with mail only is I have no addresses due to these JDB's calling only, and saying they sent letters when challenged. They are not properly identifying themselves, and caller ID shows "unknown". Interesting part of this is she is still at same address.

Also, there was no estate of any sort. Due to his health and existing on SSDI, unable to drive (car's in her name only), there just was nothing left to even consider other than the basic household items.

I'll keep you up as I get more info. Thanks for the input.

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who told her she was liable? she is not liable for anything till a judge says so. And we all know debt collectors never lie just to collect a debt.

On July 20, 2011 the FTC released a statement about the collection of debts of deceased persons. the FTC, among other statements said:

that, in communicating with someone who is authorized to pay the debts from assets of the deceased person’s estate, collectors must avoid creating the misleading impression that the individual is personally liable or could be required to pay using his or her own assets, or assets held jointly with the deceased person.

The full statement can be read here

FTC Issues Final Policy Statement on Collecting Debts of the Deceased

Some people assume a decedent's debt is forgiven or possibly written off by creditors. The law does not work that way, with the exception of federal student loans. However, spouses or other relatives are not responsible for the decedent's debt automatically, either. Many collection agents take advantage of a debtor's grief and ignorance of the law to imply the family must pay the decedent's debt, but that may not be the case.

When a person dies with a will, the will controls the financial affairs of the decedent's assets, which is called the “estate.” A will distributes assets, not debts. However, before any assets can be distributed to the heirs, all known debts must be paid by the executor. Therefore, the executor will sell assets in the estate to pay for any debts that remain. Only after the debts are paid will the remaining assets be distributed among the beneficiaries of the will.

If a person dies without a will, this is known as “dying intestate” in lawyer-speak. In this situation, the court appoints an administrator to handle the distribution of the decedent's assets according to the laws of the state. As with dying with a will, assets are distributed after debts are paid.

Here is a key point: If the estate is insolvent the creditor has no legal right to collect the debt from family members, children, or friends. There is no feudal debt bondage that ensnares an entire family, at least not in the US. In most states, the creditor cannot collect from the spouse either. However, in community property states, the question becomes more complicated.

What is a insolvent estate?

An insolvent estate is one whose assets are insufficient to pay its debts, taxes, and administrative expenses. As a consequence of its insolvency, its heirs or beneficiaries will receive nothing. Exception: unless Decedent's surviving spouse or children are awarded a family allowance, which takes priority over creditors.

What Alternatives Are Available for Dealing with an Insolvent Estate?

Three alternatives are available, one of which is not recommended.

1. Do nothing. In general, relatives and friends have no legal obligation to do anything under the circumstances to pay the debts, to communicate with the creditors, to open a probate, whatever (some exceptions: a surviving spouse or if someone has contractually agreed to do it). So, by far the simplest solution is to walk away from the problem, don't get involved. And if you choose this alternative, you should not begin taking any action at all, for example, by communicating with the creditors, and then change your mind and decide not to get involved any further. If you decide not to be involved, don't get involved from the start. Let the creditors do what they think is best to protect their own interests.

The "problem" with this alternative is that even if you have no legal obligation to pick up the pieces of the Decedent's death, the creditors and their collection agencies will do everything they can to get you to assume and pay the Decedent's obligations, a true guilt trip. And they likely won't take "No" for an answer and will continue to hound you. After all, all they want is to get paid, and they don't care where the money comes from.

Consequently, while you may have no legal obligation to pay a Decedent's obligations, if you tough it out and don't pay the creditors, you may not be out any money, but this alternative will likely cost you emotionally, with your getting repeatedly badgered by the creditors and their collection agencies, who will likely make threats to affect your credit ratings etc.

2. Deal with the Creditors Personally. This is the compromise solution. For example, you could notify the creditors of the Decedent's death and use what assets he/she left to pay them, possibly paying them with some of your own funds. Here, the "problems" are:

Are you certain that you know of all of the creditors and the validity and amount of their respective claims?

How are you going to allocate the Decedent's assets among them so that each is convinced that it is receiving its fair share?

How will you deal with the situation if, after you have allocated the Decedent's assets among the known creditors, some further creditor appears and wants to get paid, and you have already paid what assets the Decedent left?

For a variety of reason, this alternative is not recommended. Despite all your good intentions and efforts, you could find yourself in a worse situation than when you began.

3. Use the Probate Process Like a Bankruptcy Proceeding. Fortunately, most states allow this process --- in some sense like beginning a bankruptcy proceeding for a Decedent, to discharge his or her debts. [A formal bankruptcy proceeding is not allowed for a deceased person or his/her estate --- this alternative, however, mimics what would happen if it were.] You open a probate for the Decedent, probably asking the Court to appoint you as his/her Personal Representative, and then, as his/her Personal Representative, you use the Creditor's Claims procedure in the probate estate to resolve and discharge all of the Decedent's debts, with each creditor having a stated time in which to make its claim and receiving a ratable share of any assets that remain after payment of administrative expenses, funeral & burial bills, and taxes. Furthermore, it is all handled under Court supervision, so if any conflict or dispute arises, it's not directed against you, and you have the Court available to serve as a referee and resolve it.

I am not a lawyer, yet, I am just a student of law. I hope this helps you out.

Edited by BTO429

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What Gunny (BTO) says is correct - but not in Community Property States (like CA) where the laws are different. All assets and liabilities of the marriage are, under the Community property doctrine, the property of the Community,meaning BOTH spouses as a matter of law. Death does not extinguish this - only the destruction of the Community through divorce or actual separation.

Since by law each spouse is responsible for Community debts during the life of the Community, each spouse remains responsible for the debts on the death of the Community or either member of the Community.

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I am not a lawyer, and I am not an expert. But as you might conclude from my username, the subject of one spouse's liability regarding debts incurred by the other spouse is of paramount interest to me, and I have done a lot of research into the matter.

I repeat what I said before. Even in a community property state, spouses can have separate assets, and they can have community assets. They can have separate debt, and they can have community debt. True, both spouses are liable for community debt, but that is the key here: Is it community debt?

Here are some of the things I've unearthed:

[Code of Federal Regulations]

[Title 12, Volume 2]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR202.7]

TITLE 12--BANKS AND BANKING

CHAPTER II--FEDERAL RESERVE SYSTEM

PART 202_EQUAL CREDIT OPPORTUNITY ACT (REGULATION B)--Table of Contents

Sec. 202.7 Rules concerning extensions of credit.

(d) Signature of spouse or other person--

(3) Unsecured credit--community property states. If a married

applicant requests unsecured credit and resides in a community property

state, or if the applicant is relying on property located in such a

state, a creditor may require the signature of the spouse on any

instrument necessary, or reasonably believed by the creditor to be

necessary, under applicable state law to make the community property available to satisfy the debt in the event of default if:

(i) Applicable state law denies the applicant power to manage or

control sufficient community property to qualify for the credit

requested under the creditor's standards of creditworthiness; and

(ii) The applicant does not have sufficient separate property to

qualify for the credit requested without regard to community property.

My interpretation: you need to get the other spouse's signature if you want to be able to make a claim against community property to satisfy the debt.

If you are married, you can apply for credit in your own name. All credit applications must tell you that you have a right to a separate account regardless of the fact that you are married. Usually, your signature alone will be required on the credit application if you apply for separate credit. (Civ. Code, § 1812.30(j); 12 C.F.R. § 202.7(d).)

California Attorney General’s Office Women’s Rights Handbook 1998

In community property states, debts incurred during marriage (and before permanent separation) are joint debts for which both spouses are liable – unless the creditor didn’t know about the marriage and was only looking for payment from the spouse who incurred the debt.

Money Troubles: Legal Strategies to Cope With Your Debts, 9th edition, by Robin Leonard

There are other tidbits, but the bottom line is a creditor can extend credit to a borrower in the form of separate debt, if the borrower can establish his/her independent creditworthiness. If the creditor wants to be able to make a claim against community property, he'd better get the signatures of both spouses.

Regards,

DH

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Look there is really a simple thing to do about this ....

Tell them directly on the next call that they get NOTHING unless they send a written claim to the proper address proving up. Tell them since they are not identifying themselves and are using call blocking that you don't know them from a pile of dog-poo. For all you know this is some scammer that saw the obituary in the paper and is trying to gain access to accounts.

Oh and remind them that BY LAW they must send a written dunning letter by mail and that their word they sent it is not good enough.

Get an in-line phone hookup from radio shack that lets you tape the calls and then start doing so. At the end of the first call simply say "oh, by the way, I give you formal notice: this and every call you make to me from now on is being recorded." If they bother to argue about not giving permission to you, just reply with "I don't need your permission once I have told you I will record. If you call again you have granted permission by action. Don't like it, don't call."

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Thanks to all of you on your input. I'll get busy and get this going to clear the "good" from the "bad". My daughter is not against paying the claims she is aware of, only those she had no idea existed in the first place.

I've composed the letters for her to send once she has contact info for them. Yes, I'm using the 5 day letter, along with other items, so as to put them on the defensive. Then, once we resolve all, then, we will move to resolve them amicably. My biggest joy will be to see who reported negative on her CR, without the written notification. Remember, California also requires written notice within 30 days before or after reporting.

There was no estate, thus, no probate filed. All income was from Social Security Disability, state disability, and caregiver wages to our daughter for his care. All household items are older, thus, have a minimum value, including vehicle, which was not in his name.

Methuss, regarding the taping, California is a two party state, BUT, I will have her buy a recorder, then, tell them at end of next call that all following calls, if any, will be recorded. Thanks for the idea.

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