Losing someone is difficult enough and leaves Arizona residents struggling to come to terms with their loss, but when debt collectors start knocking on the door to collect the deceased's debts from family members, it adds to the family member's distress. However, it is possible that Arizona residents in this situation are facing creditor harassment without actually being liable for the debt--knowing who is liable for the deceased person's debts is very important in this case.
The Federal Trade Commission stipulates that family members are generally not expected to pay their deceased loved one's. Family members are also protected by the federal Fair Debt Collection Practices Act-this means creditors are not allowed to use unfair practices to collect their debts Creditors are also prohibited from speaking to everyone about the deceased's debts-they can only speak to that person's spouse, administrator, guardian or executor. Third parties can only be contacted to get information about the primary people listed above.
Debt does not go away when someone dies, though. Generally, the debts of a deceased person are paid from the decedent's estate. If there is not enough money in the estate to pay the debt, then the debt goes unpaid. However, it is possible that other people are liable for the debt-this happens if someone else co-signed for the loan, lives in a community property, or was otherwise legally responsible for resolving the debt. Further, state law may require the spouse to pay some health-care expenses.
Dealing with one's own debt is difficult enough, but being saddled with someone else's may just be the breaking point for some Arizona residents. However, they may not be aware that they have options available to them that not only can reduce their debt, but also put an end to creditor harassment-declaring personal bankruptcy. Personal bankruptcy, whether Chapter 7 or 13, may be one way struggling Arizona residents can start the new year with a clean financial slate.
Source: Federal Trade Commission, http://www.consumer.ftc.gov/articles/0081-debts-and-deceased-relatives, Accessed January 12, 2015