Author Topic: Wife wants to settle recently deceased husband's credit card debt  (Read 14157 times)

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HeadsUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #15 on: December 08, 2010 08:13:28 PM »
I can speak from personal experience on this, there is no way that I would open probate.  And I wouldn't say a word to any of the creditors nor to any of their collection agencies or attorneys.  I would drain every account of the deceased person as quickly as possible, and as for the house, just live in it, and get your use out of it.  The creditors main objective is to get her to open probate, then they start filing their claims against the estate, and the probate court does all the dirty work for them while they sit back waiting to get paid.  If you don't open probate, they don't know how to deal with that situation, and other than a lot of phone calls and bluffing, they won't do a damned thing.  They will never open probate themselves because they don't want to deal with the headaches of paying the other creditors.  They won't sue, because they would be suing a dead man.  After about 2 years, they will give up and stop calling and stop sending letters.  And never get paid.  That's what happened in the case of my dead relative.  None of them got a dime out of his estate.  All the assets were quickly drained away by various relatives and the last remaining asset, the house, just sits there in the deceased person's name, while relatives live in it for free. 
Finally a collector admits it...

"The reality is that there are people who can't pay and the job of an agency in my opinion is to separate those who can and those who cant and to not waste resources and efforts on those who cant." -- Dr. Evil.

All this nonsense about aggressive judgment enforcement against someone with no assets is just that-- utter nonsense.

http://www.debtorboards.com/index.php?topic=13309.msg100303#msg100303

Tmann

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #16 on: December 08, 2010 08:48:57 PM »
1) if their is a property subject to probate you'll have to probate eventually to transfer it.  If there an equity your method may not prove out to be the best method.  2) Once you open probate and need to file court documents and attest that just and known debts have been satisfied you could be in a pickle.  3) I can tell you from experience in the field NC and SC have been known to lock up the executor for not paying creditors timely.  4) If the creditor does sue, they sue the estate/ the executor not the dead-man.

cgoodwin

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #17 on: December 09, 2010 01:04:01 AM »
I can speak from personal experience on this, there is no way that I would open probate.  And I wouldn't say a word to any of the creditors nor to any of their collection agencies or attorneys.  I would drain every account of the deceased person as quickly as possible, ....

That is a lawsuit waiting to happen for the executor of the estate.  Depending on the amounts of the debts, they may or may not pursue and the participants may be guilty of a crime by taking the assets improperly. Getting away with something does not make it legal or the best action.
If you think this is legal advise.......
ask yourself why I wasn't smart enough to avoid this myself?!?

HeadsUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #18 on: December 09, 2010 04:55:35 PM »
That is a lawsuit waiting to happen for the executor of the estate.  Depending on the amounts of the debts, they may or may not pursue and the participants may be guilty of a crime by taking the assets improperly. Getting away with something does not make it legal or the best action.

You see?  That's the problem.  There is no executor of the estate.  No one ever opened probate.  No one ever will open probate.

I can tell you that absolutely nothing happened.  Now I will mention that none of these were local businesses, none of them were small time operators, who might have taken a more personal interest in the matter, and might have actually done something about it.  These were all huge banks with huge credit card limits-- the total unsecured debt was in the hundreds of thousands range. 

And none of them opened probate.  NONE!

They all followed a predictable pattern, they sent letters and made phone calls, asking this question:  "may I speak to the person who is handling the affairs of the late XXXX XXXXXXXXXX."  The letters asked for the "personal representative" of XXXX XXXXXXXXX to contact them and arrange for the filing of a claim against the probate estate.  All of them asked for probate info.

Later, they sent the accounts to collection agencies that specialized in the handling of deceased collections.  I thought for sure that they were going to do something like file a lawsuit or open probate.  But they did absolutely nothing but make phone calls and write letters.  Eventually, they all gave up and we haven’t heard anything from them in over a year.

They all depend on voluntary compliance, they depend on the survivor opening probate.  Once that happens, they can passively file a claim against it in probate court.  They can file a lawsuit against the executor (personal representative).  But without that, they can’t do anything.  Without a personal representative’s name, they don’t know who to sue.  And we never told them what our names were.  We gave them false names like “Billy Bob“.  Then we stopped talking to them all together.  And while they could open probate, they don’t do it, because it is a major headache and can get quite costly for them as other creditors could then sue them. 

The problem with debt collectors is that they don't know what to do when people don't cooperate with them.  And they couldn't resort to the old standby of suing any of us, because they didn't know who we were or who was responsible for the estate, and they figured quite correctly that as time went on, the assets in the estate were all lost.  There was nothing left for them to go after.  And it would cost a fortune for them to hire a probate attorney to open probate and go after the lost assets and all the various people they would have to subpoena to court to testify about what happened to the assets.  They just didn’t bother with it.

As for the assets, it was amazing how easy it was for various relatives to take over accounts with a death certificate and then drain them.   I was afraid that they were going to get into trouble for doing it, so I stayed out of it, and I didn’t get a penny of the whole estate.  I was wrong.  Nothing happened to them other than getting thousands of dollars in their pockets.
« Last Edit: December 09, 2010 05:01:19 PM by HeadsUp »
Finally a collector admits it...

"The reality is that there are people who can't pay and the job of an agency in my opinion is to separate those who can and those who cant and to not waste resources and efforts on those who cant." -- Dr. Evil.

All this nonsense about aggressive judgment enforcement against someone with no assets is just that-- utter nonsense.

http://www.debtorboards.com/index.php?topic=13309.msg100303#msg100303

CleaningUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #19 on: December 09, 2010 05:09:10 PM »

Estate size comes into play. Small ones are less problematic.

If funds are drained illegally, the executor has the fiduciary responsibility to claw-back the illegal transactions. If you are the executor, it is you that has that fiduciary burden.

You may be right, HeadsUp, that the creditors sat on their hands in your case and the executor got a pass.

I would not, however, be one to advocate to others to put themselves in compromising positions.


HeadsUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #20 on: December 09, 2010 05:40:59 PM »
Estate size comes into play. Small ones are less problematic.

If funds are drained illegally, the executor has the fiduciary responsibility to claw-back the illegal transactions. If you are the executor, it is you that has that fiduciary burden.

You may be right, HeadsUp, that the creditors sat on their hands in your case and the executor got a pass.

I would not, however, be one to advocate to others to put themselves in compromising positions.

See, that's the problem.  No probate was ever opened.  There never was an executor (or personal representative in some states).  No one had any fiduciary responsibility to do anything.  That's what made it a nightmare for the debt collectors. To become the executor, the person has to file with the probate court, and swear an oath to take on the fiduciary responsibilities of the estate.  Nobody did this.  So, the debt collectors never knew who to talk to about the matter.

In my case, the deceased person was not married, had no children, and so the next of kin was a bit removed from the whole situation, and not that easy for a creditor to figure out.  They really were at a loss to know who to come after.

And I must say that it is extremely important, if someone plans of doing this, to stop talking to the debt collectors on the phone.  The less they talk about the estate the better.  The more the creditors are in the dark about all of it, the better.  Or on the other hand, if you are worried that the creditors are going to talk to a relative who might spill the beans, then maybe it is best to go ahead and answer the calls from the creditors and just give them nothing but false information.  Never use your real name or your real relationship to the dead person.  Pretending to be someone else can be fun.

Finally a collector admits it...

"The reality is that there are people who can't pay and the job of an agency in my opinion is to separate those who can and those who cant and to not waste resources and efforts on those who cant." -- Dr. Evil.

All this nonsense about aggressive judgment enforcement against someone with no assets is just that-- utter nonsense.

http://www.debtorboards.com/index.php?topic=13309.msg100303#msg100303

cgoodwin

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #21 on: December 10, 2010 02:26:57 AM »
I'll say this HeadsUp and then I will say no more.

There are limited circumstances where this would be possible and yours seems to be one of them.  The OP is writing about the widow of the deceased, not a distant relative.  I would assume she is living in the house in question.  What has not been determined is if there is a mortgage on the home.  If there is a mortgage, your idea would not work because foreclosure would be looming around the corner.  If the house is owned free and clear, she would have to stay in it because she could never sell it.  Also if there are rightful heirs to an estate of means, I'm sure they would not be happy with someone draining the accounts willy-nilly. Automobiles could also be a problem, short of forging the deceased name on documents.

I guess the bottom line is, any illegal activity can be gotten away with, but it should not be recommended on a public forum as the ideal way to handle things.
If you think this is legal advise.......
ask yourself why I wasn't smart enough to avoid this myself?!?

HeadsUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #22 on: December 10, 2010 09:19:30 PM »
I'll say this HeadsUp and then I will say no more.

There are limited circumstances where this would be possible and yours seems to be one of them.  The OP is writing about the widow of the deceased, not a distant relative.  I would assume she is living in the house in question.  What has not been determined is if there is a mortgage on the home.  If there is a mortgage, your idea would not work because foreclosure would be looming around the corner.  If the house is owned free and clear, she would have to stay in it because she could never sell it.  Also if there are rightful heirs to an estate of means, I'm sure they would not be happy with someone draining the accounts willy-nilly. Automobiles could also be a problem, short of forging the deceased name on documents.

I guess the bottom line is, any illegal activity can be gotten away with, but it should not be recommended on a public forum as the ideal way to handle things.

I agree with you that it is not the ideal situation, and it certainly won't work for everyone in every situation, and in fact, if there are significant assets-- if the estate is NOT insolvent-- then it may be best to open probate and do it the right way.  But it sounded like the OP had an insolvent estate, and in that case, doing it  the right way using probate will get her nothing but a lot of effort and headaches as all the assets get drained away to pay the creditors leaving almost nothing for her to live on.  If the house has a mortgage on it, she could continue to pay it and still live there without doing any changes to the mortgage.   If it is free and clear, she can just live in it for free.   My relatives are still living in a dead man's house for free.   I would hope the other heirs would realize that this is money for her to live on and not contest the matter.  Automobiles can continue to be driven years after the owner died, just keep the insurance paid up, and keep registering it when it comes up for renewal.  My relatives are still driving a dead man's car.  Life insurance and any accounts where she is named as beneficiary pass directly to her without probate at all.  Other accounts will require some more info like a death certificate and an affidavit for collecting personal property of the deceased (the name varies from state to state, but it is a simple thing to fill out and it works quite well in most cases).

My main point is to let people know that if you are left with an insolvent estate, you have options that no textbook is going to tell you about.  The creditors are counting on you to do the right thing and make their job easy.  When you don't do that, they seem to give up, because it would be a nightmare for them to open probate on an insolvent estate.
Finally a collector admits it...

"The reality is that there are people who can't pay and the job of an agency in my opinion is to separate those who can and those who cant and to not waste resources and efforts on those who cant." -- Dr. Evil.

All this nonsense about aggressive judgment enforcement against someone with no assets is just that-- utter nonsense.

http://www.debtorboards.com/index.php?topic=13309.msg100303#msg100303

CleaningUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #23 on: December 10, 2010 10:18:32 PM »
HeadsUp, your theory "works" as long as the status quo does not change.  But "works" does not equate to legal, and I am sure you do not wish to be seen as recommending something that is illegal.

The minute the status quo changes, the can of worms opens.  The example that CG presents is a good illustration. If the spouse attempts to sell the property, he/she must be able to grant title.  If in order to grant title the signature of the deceased is required, then the title must be quieted since the deceased is unable to hold the pen.  The quieting of the title is a judiciary function.   Once a judge gets involved, one never knows where the worms may crawl.


Fighting back in FL

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #24 on: December 10, 2010 11:07:24 PM »
The estate will be liable...hire an attorney that will settle all debts at a reduced amount..depending on what he owes, the attorney may be able to settle at 30% of the balances owed. The CA would rather settle for cash than wait for probate!

HeadsUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #25 on: December 11, 2010 05:05:51 PM »
HeadsUp, your theory "works" as long as the status quo does not change.  But "works" does not equate to legal, and I am sure you do not wish to be seen as recommending something that is illegal.

The minute the status quo changes, the can of worms opens.  The example that CG presents is a good illustration. If the spouse attempts to sell the property, he/she must be able to grant title.  If in order to grant title the signature of the deceased is required, then the title must be quieted since the deceased is unable to hold the pen.  The quieting of the title is a judiciary function.   Once a judge gets involved, one never knows where the worms may crawl.

Trying to sell real estate in this market would be almost a waste of time because she won't get much for it anyways, and whatever she does get will just be gobbled up by the creditors as they file their claims against the probate estate.

What I'm saying is that if the estate is insolvent (and it sounds like it is) then she's not going to get anything from filing probate but a lot of work responding to creditors and paying their claims.  She will get a small fee for being the executor and that's it.  There will be no inhertance left after the creditors get paid.  So, if she's not going to get any money out of it, why bother going through all the trouble of probate?

We got letters from creditors' collection agencies saying they were monitoring the probate courts in our area and if we ever filed probate they would be notified and they would then file their claims against the probate estate.  It's what they do.  They sit back passively waiting for you to open probate and then they come after it.  All the scary letters they sent us and the scary phone calls were all bluffs.  They tried to scare us into voluntarily complying with their demands for payment.  It didn't work for them on us.

Everyone is conditioned into thinking that you have to open probate, but you don't.  It is voluntary.
Finally a collector admits it...

"The reality is that there are people who can't pay and the job of an agency in my opinion is to separate those who can and those who cant and to not waste resources and efforts on those who cant." -- Dr. Evil.

All this nonsense about aggressive judgment enforcement against someone with no assets is just that-- utter nonsense.

http://www.debtorboards.com/index.php?topic=13309.msg100303#msg100303

CleaningUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #26 on: December 11, 2010 05:09:35 PM »

...If in order to grant title the signature of the deceased is required, then the title must be quieted since the deceased is unable to hold the pen.  The quieting of the title is a judiciary function.   Once a judge gets involved, one never knows where the worms may crawl.



This will attend no matter when the asset is sold.


flacorps

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #27 on: December 15, 2010 09:35:32 PM »
I just wanted to point out that while opening probate soon after the death is a way to curtail claims, there is often also a statute of limitations for claims against a deceased's estate that can come into play as well ... in Florida I believe it's two years. So if everyone can hold their horses for two years, creditors claims against the estate will not be recognized in the probate ... unless the creditor has previously taken key steps like filing a caveat.
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HeadsUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #28 on: December 17, 2010 05:30:02 PM »
This will attend no matter when the asset is sold.

But if you never sell it, you just live in it for free, then it doesn't matter.
Finally a collector admits it...

"The reality is that there are people who can't pay and the job of an agency in my opinion is to separate those who can and those who cant and to not waste resources and efforts on those who cant." -- Dr. Evil.

All this nonsense about aggressive judgment enforcement against someone with no assets is just that-- utter nonsense.

http://www.debtorboards.com/index.php?topic=13309.msg100303#msg100303

CleaningUp

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Re: Wife wants to settle recently deceased husband's credit card debt
« Reply #29 on: December 17, 2010 05:49:55 PM »
Correct.

But when you die and your heirs come to sell it, they're stuck with the nightmare of clearing title.




...I know...at that point, you wouldn't care....

 

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