About 4 years after my sister died, I got a letter from a collection agency claiming that her estate owed them money. The letter also said that I could write them and ask for a detailed summary of the debt. I did so, and never heard from them again. That puzzled me. Why did they even bother sending the letter if they weren’t going to follow up?
My bolding.
You’re more charitable than I am.
Why does the computer program keep spitting out names of relatives to go after?
Because somebody programmed it to do that.
Why are the télé-drones not allowed to stop calling the relatives?
Because somebody has put a policy in place that they’re not allowed to.
They may not wear top hats and twirl moustaches, but the managers at these companies have made it company policy to go after grieving relatives and prey on their weakness, loss and perhaps guilt.
When my wife’s aunt died and she was the executor we got a lot of calls from different agencies trying to collect a minor amount on a credit card. There was nothing in the estate, she had even pre-paid for her own funeral. They tried to say we should honor her by paying off her debt, she would have a reputation as a deadbeat if the debt wasn’t paid. My wife was pretty terse with them and said their was nothing in the estate. If I answered the phone they’d hang up before I was done ranting and raving at them about what kind of despicable pieces of crap they were.
Seeing debts in terms of morality, not business.
To be more verbose, it’s people not getting that the risk of default is priced into the debt to begin with, combined with a moralistic notion that not paying debts is immoral, as opposed to the expected outcome of a certain percentage of all debts which get created.
My octogenarian grandmother was able to get credit cards and died with credit card debt. Anyone stupid enough to extend unsecured credit to someone with no job and no assets and the better-than-even-odds probability of catastrophic medical expenses in the next few years deserves what comes to them, which, in a lot of their cases, was nothing, because my mom wasn’t and isn’t dumb enough to pay debts she doesn’t owe out of her own money.
It is also often influenced by traditional ideas of debt as an obligation in response for somebody doing you a favor. If a friend lent me some money and I died before I could pay it back I would want my heirs to make sure the debt was paid.
But credit card companies are not lending you money as a favor, and as Derleth notes, their business model is predicated on the expectation that not all the money they “lend” will get paid back. They are offering you credit in order to make money out of you, and if you make the Great Change while still owing them some money, you have not let them down or cheated or taken advantage of them in any way. You don’t have an ethical obligation in commercial transactions to pay any more than you’re legally required to pay.
This may vary by state. Here, utility charges are billed to the house, so even if the owner who used to live there is dead, that property still owes the bill. If the heirs live there now, they owe the bill. If the house is sold, the utility company can try to collect from the new owner (and they’re pretty good at collecting, since they can shut off the utilities to the house if not paid).
Of course, utility companies are publicly regulated, so they are pretty concerned about their public image.
Because some people pay up just from that one letter. And it’s mostly automated so only costs them under $1 to mail out the letter. But following up with a detailed summary will cost real money, in requiring individual research & responses. And the kind of people who ask for this are usually not the kind who can be buffaloed into paying, anyway. No point in wasting more money on them.
So why even mention that in the original letter? Because it makes them sound more legitimate; like they actually have a detailed summary on the debt. (Many collection agencies buy up groups of bad debts from businesses; often those come with no more information than the amount of the debt and (maybe) the date it was incurred.
Yeah, but the question I’m asking is, what moral obligation do your offspring undertake when you take on a debt? Assuming SOME moral obligation exists (and I think one does; do you justify refusing to honor your promises on the basis of the ability of the promisee to adjust?), that moral obligation is clearly with the person making the promise. How does the OP suggest that the moral obligation should then be saddled on the offspring?
I recall reading that it varied by jurisdiction regarding a debt for a chattel (i.e. a loan secured by a property like a car etc.) In some places the law was if the item was repossessed then the debt was done, in others the item could be repossessed and sold, and if the sale did not cover the entire debt, the creditor then could go after the customer for the balance.
(There’s an old Jerry Lewis movie Hook, Line and Sinker, where his doctor tells him he has 6 months to live, suggests he take a 6 month vacation in Europe and live it up on credit cards. In the days before cards could be verified immediately online, the doctor said he would be dead before all the bills came in. Then… a few months later doctor finds him in Spain to tell him the lab made a mistake… hilarity ensues, including buying a local body and shipping it back to the USA for a closed coffin funeral; where it gets mixed up with some Kentucky colonel’s coffin, and the widow wants one last look before the burial, they open it only to find a black corpse inside… ha ha.)
The term is recourse vs. nonrecourse loan. Even in those states with recourse mortgages* most lenders don’t pursue any uncovered debt.
- From “death pledge” in French. Think about that the next time you get one.
I didn’t.
The term isn’t referring to the borrower and the likelihood of dying before paying it off. Rather, historically the early common law had two different types of securities in land: “gage mort” and “gage vif”.
In a “gage mort”, the lender took title to the land, but could not use the lands or take the fruits of the land. The borrower continued in possession and took all the benefits of the land. That was a “dead pledge” because the lender technically owned the land, but the land was “dead” to him.
In the “gage vif” (“living pledge”) the lender took title to the land, and got the fruits of the land. The land was “live” to the lender.
The “gage vif” died out a long time ago, because it was much harder to pay off. In a “gage mort”, the borrower continued to have the income from the land and could use it to pay off the lender.
That couldn’t happen in the case of a “gage vif”, since the lender had the land and the fruits. The borrower had to have some independent source of income to pay off the “gage vif”.
Economically, a “gage mort” makes more sense and survived. Due to quirks in Law French, it eventually became known as a “mortgage”.
Absolutely.
And that, too.
One reason I think the 1/2 hour I spent talking to a lawyer after my husband’s death was worth every penny was because he coached me on how to deal with that sort of thing. Once the creditors realized I knew my rights and had a lawyer they pretty much evaporated.
Also got quite a few scam calls, to.
depending on when you die during the month, the estate may have to pay back social security money paid out for the month you die in. The cutoff is early in the month.
Social Security checks come a month in arrears. My April check comes the third Wednesday in May. This is standard though the week you get the check depends on your SSN. I don’t recall the algorithm.
Though I haven’t seen this kind of story in ages, a long time ago I read more than one true or fictional tale where the son felt honor bound to pay the debts of his deceased wastrel father. Because it was the “right” thing to do.
Perhaps these stories were paid for by banks and other creditors to create a moral obligation on the unwitting.
Thanks for this explanation. I’m closing on a new house tomorrow, and may pass along this info if I get the urge to impress my agent and the people at the title company.
Have fun! If they say “go on, where’d you get that from!” tell them Megarry and Wade, the Law of Real Property, chapter 1.
Yes. Our court handles lawsuits filed by collection companies going after old debts all the time. Debt has become a commodity which may be bought and sold, sometimes several times over. I think the most I ever saw was a particular credit-card debt which had passed through the hands of eight (!) different creditors before landing in our court.
On a somewhat related note, back in 2006 two tornadoes blew through Springfield, Illinois. One house that suffered damage had been empty for some time, its owner having died years before, though not necessarily derelict. Anyway, the twister blew an oak tree right into the house, destroying it beyond all repair. The City of Springfield wanted someone to do something about the decaying house, but there was a problem: the house had been left to the daughter of the woman who had owned it. The daughter, however, lived in California and was near destitute herself, and she told the City that she had neither the money nor the desire to pay for the necessary repairs, nor was she in a humor to come to Springfield to sign paperwork.
As far as I know, the house is still there, still with an oak tree in the middle of it.
Usually what happens in those situations is that the town will eventually seize the property in lieu of unpaid property taxes.