Collecting a decedent’s debts

Financially, death is like going bankrupt.  The main purpose of estate administration is to collect all of a decedent’s probate assets, pay all the debts using the priority order established by state law, and then distribute what’s left, if anything, to heirs and beneficiaries.

Because a great number of people, especially in today’s economy, owe more than they are worth, heirs and beneficiaries will often walk away with nothing.

Creditors, of course, are anxious to be paid and need to be diligent to collect as many states have technical procedures with which creditors must comply.  Failure to comply with these procedures may cause perfectly valid claims to go unpaid.

Sometimes, however, a creditor might go “too far” in trying to collect.  In New York Couple Harassed by Creditors Trying to Collect Debt Their Dead Son Owed, FoxNews.com, Jan. 15, 2009, the reporter explains how a New York couple is “haunted by call from credit agencies wanting to collect debt their dead son owed.”  According to the decedent’s mother, the her son had no assets to pay the debts and the debts were solely in her son’s name.  “The family’s lawyer sent at least one letter to each company explaining the circumstances, but got no results. When reporters got involved, at least one — Macy’s — agreed to close the account and leave the grief-stricken family alone.”