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Credit Card Companies Prey on the Grieving

When a family member passes, there are of course a large number of competing demands for our attention during a time of grief. It is in the midst of this that collection companies often take advantage of family members of the deceased.

In Colorado, the estate of a deceased person must pay the deceased’s creditors only if there are assets in the estate in excess of state spousal and family exemptions and allowances. These can vary by the circumstances but often add up to around $50,000.00. That is in part why estates with no real estate to transfer and less than $50,000.00 in assets are not required to open a probate case in court. If the estate is not obligated to pay or lacks assets, a person’s heirs are usually not obligated to pay their debts unless they themselves were also co-signers on the account.

Nonetheless, when someone passes, collection companies for credit cards often contact the surviving family members and harass them into making payments on the deceased’s credit card accounts. These collection companies are taking advantage of family members trying to manage their grief and the deceased’s affairs and falsely claim that the family members are responsible for the debts.
In a probate case, there is an orderly process of assembling a list of the estate assets and debts, notifying creditors by publication and by mail, and determining the amounts of the estate debts that will be paid. There is never a rush to pay off accounts immediately after someone’s death and no one should allow a creditor to intimidate them into paying bills that they do not owe. It may be that it does not make sense to pay on secured loans like car loans if there is no intention to keep the car. Even where the estate has assets to pay creditors, credit card collection companies that attempt to intimidate people into paying on their loved ones’ credit card accounts are using coercion to attempt to “jump ahead” in line. For this reason, if you are handling the financial affairs of a family member, be sure to get good legal advice before attempting to settle any of the deceased’s debts.

Posted in Elder Law.