ABSTRACT: Sometimes the only way to know if you truly owe a debt is if you are hounded by a debt collection agency is to get one's credit report.
CONTENT: This article is mainly aimed at people who are on tight fixed incomes, such as SSI, Social Security, or unemployment benefits, but may also be of help to anyone being harassed by debt collectors whether one's own debt problems, or a debt belonging to a recently deceased family member. I'm by no means an absolute authority on this issue, but I give examples of how I handled my own debt problems while being a recipient of SSI Disability benefits, and also how I dealt with the debt my deceased mother had owed.
Unless you are 100 percent financially secure and have no problem in paying off bills, including credit cards or loans, sooner or later everyone of us will get hit by one of those annoying debt collection agencies. Some of these debts that one may owe might actually be quite small, but while small, would prove a hardship to pay off especially if you're on a fixed income, and of course worse if the total debts one may owe are substantially large.
While my mother was still alive I had no problem paying off my four credit cards even though I was receiving SSI benefits. Yes, I had four, and the maximum credit for each one started out at only $300.00 so it wasn't as if I had credit cards with thousands and thousands in maximum credit. I by no means used my cards for extravagances, but only to stretch the low total household income that both my mother received with her Social Security and Pension, plus my own benefits; in other words I was using the cards primarily for food or medications and other necessity items. Later on, since I proved to the credit card company in which I had those four credit that I was reliable in paying them off in time, they raised the maximum amount to $500.00. Believe me when I say they really weren't doing me a favor.
At first, when one owes a debt to any company, credit card or loan, the company itself will at first only send letter reminders that you owe them, however, if the company gets no satisfaction from you in honoring your debt to them, that is when they will turn the outstanding debt over to a collection agency, and some of these agencies are relentless in pursuing you, often by constant letters and or making numerous and rather annoying phone calls. The first thing, however, is that one shouldn't panic.
Once hit by debt collection agencies people will perhaps think in terms if there is an easy way out, such as declaring bankruptcty. This strategy however, only works for really large overall debt. Most lawyers or agencies that handle bankruptcy won't even consider handling cases unless the overall debt is at least $5,000. And, when you think of it, this makes for common sense. What I mean by this, say your total debt is about $2,000. Now if you're on a fixed income and can't pay that debt off, how in the world can one expect to pay a bankruptcy lawyer or agency the usual standard starter fee of about $1,000, even on some kind of installment plan? Therefore, as you can see declaring bankruptcy is definitely not the answer in this case. If it turns out your overall debt is relatively small, really try to work out some plan with the company itself, or if possible maybe you can get the advice of one of those debt consolidation companies.
It was different of course with my mother, who in 1987, did have to declare bankruptcy as her total debt between credit card and loans amounted to $45,000.00. While she wasn't on a fixed income then and was earning a fairly decent salary, there was no way that she could pay off her debts, thus she turned to BUCCS (Budget & Credit Counseling). One important thing however, if one does declare bankruptcy, your bankruptcy status will be listed on your credit report for at least seven years, and could be a negative factor against you and lower your credit score, which in turn will make any future attempts in getting a loan or mortgage.
Now here is where it is important to know your credit report, and I urge anyone who is being attacked by debt collection agencies to get it. It may very well turn out that believe it or not, you may not even owe the debt, in which the debt collection agencies are hounding you. First, one must understand the statute of limitations of how long a debt lasts and one can find out just how long a debt that one owes last and if it is indeed collectable by going to the Credit Infocenter Website. Unfortunately, as far as credit cards and major loans, these are most often considered open debts and yes you will still owe them regardless of how many years have passed. However, that is only true with credit card accounts specifically in your name only and not for a deceased member.
If a member of your family has died, and they owed debt of any kind, the important thing to remember that unless it was some kind of joint account with not only the name of the recently deceased person, but your name as well, then you don't, repeat don't owe that debt to that company. When my mother died, she was in debt of about $25,000.00. I proceeded to send a copy of her death certificate to each and every company she had debt to, explaining in my letter to each, that any debt she may have owe was negated upon her death. For the most part this worked with all companies involved, save for one that continued to hassle me, or I should actually say my mother. It was as if it weren't getting through to these people that my mother was in fact deceased.
The one company that kept sending letters and/or calling, believe it or not, was the very same hospital that she had died in. The letters sent were always in her name and when I got phone calls, the person always asked for my mother. I kept telling these people either in writing and/or by phone call my mother was deceased. Each and every time I dealt with them, I was told to send another copy of her death certificate, of which I did. Some time would pass and I would get another phone call, from the very same exact person that they hadn't received the death certificate. I was to send a total of three copies of her death certificate to the debt collection agency. Then more time passed, and I get a call from a lawyer representing the hospital debt collection and asked for my mother. I had to explain the whole thing all over again that I've been sending copies of her death certificate to prove she had died. The lawyer asked me to send a copy of the death certificate to the law firm of which I did. So far this has seemed to settle it once and for all, but I couldn't think how lame are these people? This bill was in connection to my deceased mother, yet they kept harassing the issue. Since we're talking about the hospital billing collections itself, couldn't they have simply checked on their computers that my mother was in fact deceased?
But what about those other debts you may have owed? Do you really owe that money? In my own personal case I can answer both yes and no. No that I didn't have the obligation to pay my mother's outstanding debts, but yes when it came to my own credit card debt. When my mother died, I now had the additional hardship of trying to pay off those credit card bills, whereas previously I hadn't. My mother had no life insurance, savings or checking accounts. It did turn out that there were some funds available via her old former place of employment, but it was only enough to cover her funeral costs plus a few other bills. By the time January of 2007 came, I no longer had funds to pay not even the barest minimum for each credit card. While my SSI benefits did increase a bit after my mother had died, it still nonetheless was only enough for basic living expenses.
In the meantime, as I was no longer able to pay off those credit cards, the over the limit and late fees kept piling up and out of control. The ironic thing was that even though I was placed on hardship status with my constant contact with the credit card company, they still kept adding those fees. Now I really was in a bind.
Then a seeming miracle occured. I received a letter from the IRS addressed to my mother around February of 2007, that indicated that she had been due Tax Earned Income Refunds for the tax years 2003 and 2004. And while she was deceased, since I was considered her personal representative being her daughter, I was entitled to claim that money. While it took some months to actually get the money due to all the paperwork involved, once I did get the refunds, you better believe I opted to pay off those credit cards in full.
Now, one may ask, what about those debt collectors that still relentlessly hound a person from old former debts from many years past? Here again is where it is important to number one, find out about the statute of limitations of how long that debt is valid. Number two, this is where it's important to find out one's credit report and what is specifically listed on it. And three, most important is to find out if that debt collection agency is actually a legitimate one, or one of the many scam ones that are out there.
If a debt collection agency is truly legitimate and you are getting letters and/or phone calls, the debt collection agency itself will most likely be located near where you live, however, if you are receiving endless letters and phone calls from an out of state agency, most likely it's one of those scam debt collection places. Before you make any reply to these places whether by letter or by phone call, do research first! I can't emphasize that enough. In my own case, I've gotten numerous phones calls from a place called Portfolio Recovery which is located in Norfolk, Virginia. My answering machine had picked up their message to me, and I was all set to call them, but first I did a background check on them.
One of the best sources to find out whether you are dealing with scam debt collection agencies is the Rip Off Report.com Website . At this website, they had a whole warning about Portfolio Recovery. This agency often somehow finds old past debts and will relentlessly go after people to collect the money. The site warns that once you make ANY kind of contact with this agency, whether by letter or by phone, they got you, meaning even if a debt has gone beyond the statute of limitations of when it can be collected, once you contact this agency, you have now reopened it and now you will owe on that old debt. You can read the specifics of Portfolio Recovery Here.
Next get that credit report. On one's report one will find a section called "Debt Collections" that one can click on, it will then open a page listing all the places you may owe debt to by an agency. If none are listed, and you are being hassled by any debt collection agency, then you know whatever seeming debt that agency is trying to collect from you is bogus and you are dealing with a scam operation. This was true in my own case. Here Portfolio Recovery was harassing me for some old debt that was no longer valid and the agency wasn't listed on my credit report. Conclusion: I didn't owe them a cent.
In summary, no matter what debt situation you may personally be dealing with, become informed of your rights. You can read up on your rights as a debtor by going to the Fair Debt Collection Practices Website Yes, if you have credit card debt you will owe the company, but if for some reason you find yourself in a spot where you can no longer pay, try to work things out with first the company itself, and then perhaps look into one of those debt consolidation agencies. Inform yourself and do research to learn if you truly do owe those other debts and inform yourself of the statute of limitations. Also, get your credit report as this may be the only way to find out the legitimacy of any seeming debt you may be hounded by via a debt collection agency. Finally, look up the name of the debt collection agency itself that is hounding you to see if it's one of those scam ones.
http://wiki.answers.com/Q/Who_is_responsible_for_your_credit_card_debt_after_your_death
http://hubpages.com/hub/Unscrupulous-Attorneys-Buy-SOL-Expired-Debt
http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml#2
http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml
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