Frequently Asked Questions About Debt Collection (continued)
I am married but have a credit card that is in my name only, which I have recently defaulted on. Can a creditor or debt collector go after my spouse for repayment of this debt even though his name isn't listed on the credit card?
Yes, marriage is like a partnership with each of you jointly liable for any debts incurred during the marriage. It doesn't matter if your spouse is or isn't listed on the card as a joint accountholder, he or she can still be sued, have his wages garnished, etc., just as if he incurred the debt.
I have been living with someone for a long time. Can a debt collector go after him for my delinquent debt, even if we aren't married?
No, a debt collector or creditor cannot go after someone with whom you are living with, even if you've been living together for thirty years. The biggest advantage of living together as man and wife without getting married is that you protect yourself from the financial and legal liabilities of your partner. For example, if your partner became very sick and accumulated a massive amount of medical debt, you would be liable for it if you are married to that person, but you wouldn't be liable if you are just living together.
Do I Have to Pay my Parent's Debt?
Many people have the misconception that they are responsible for paying their parent's debts, particularly when the parent dies with outstanding bills. This simply isn't true. The only time one is responsible for paying a debt is when (1) he or she acquired the debt alone or jointly with another person (such as a spouse); or (2) when one co-signs a loan for another person.
Unless you co-signed for your parent's loan or are the joint accountholder on any type of account with your parent, you are not legally responsible for paying the debt. Who is responsible? Your parent's estate is responsible. In fact, after paying for your parent's funeral expenses, unpaid creditors are next in line for receiving any money or assets in your parent's estate. You only inherit your parent's wealth after all creditors are paid.
If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors receiving priority. This means that, if your parent died with little or no money in their accounts and didn't own a home, unsecured debt, such as credit card debt will not be paid to the creditors. Such creditors must eat the loss, but in no circumstance, are you as the child of the deceased person required to pay such debt.
If a creditor or debt collector tries to convince you that you are responsible for paying your deceased parent's debts, refer them to the executor or executrix of the estate. If they keep harassing you, send them a certified letter demanding they stop contacting you altogether. If they persist, file a complaint with your State's Attorney General's Office.
NOTE: Some states have legislation on the books forcing grown children to pay for the nursing home costs of their elderly parents, even if they have been estranged from their parents for years. AARP has reported that some states are beginning to take advantage of these laws to recoup expenses for indigent nursing home residents. For example, AARP claims that the state of Pennsylvania is now taking advantage of laws already on the books seeking payment where it can.
Will an Unpaid Medical Bill Go On My Credit Report?
An unpaid medical bill will not go on your credit report unless the hospital or doctor to whom you owe the debt subscribes to at least one of the three major credit reporting agencies (Experian, Equifax or Trans Union) or the debt is turned over to a collection agency, which will definitely report it to one or more of the three credit bureaus. Odds are very high that any debt you owe to a hospital will appear on your credit report.
If you dispute the validity of the debt within 30 days of being notified that you owe it, a creditor or debt collector cannot place the account on your credit report without a notation that you dispute owing the debt.
Once a medical bill is reported to a credit report, is there anything that can be done to remove it?
If you agreed to pay the debt, you could try to negotiate to have the account removed from your credit report in exchange for payment, but be sure to get this agreement in writing (signed and dated by other party) in order for it to be legal and binding, before you send in payment. Do not rely on the debt collectors oral promise that the account will be removed.
END OF FREQUENTLY ASKED QUESTIONS SECTION
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