Interesting article in WSJ this morning. Can't cut and paste it so will summarize.
Storyline: 68 year old woman loses her husband to colon cancer. After his death, as many as 10 phone calls a day pour in from debt collection firms seeking repayment for the $16,651.52 BOA credit card debt her husband left behind. Calls stated that she was not legally obligated to pay (which is true) then veered off into discussions about how the widow could "get this taken off her plate". She had nothing, she had sold their motor home to help cover medical bills and funeral costs, all that was left was $2,000 in life insurance proceeds. She offered them that "just to get this off of her head".
There is a new movement in credit and debt collection to seek restitution from survivors. Debt collectors say that the survivors have a moral obligation to pay, especially in cases where they benefited from purchases wrung up by someone else. (they don't have any legal obligation, unless they were co signers on a loan).
ACA international, the industries main trade group, says that collecting payments on debts owed by the dead helps ensure that lenders will continue to extend credit at competitive interest rates to older Americans.
Quote from the article "Collectors are starting to realize just how much money you can get from someone when they are at their most vulnerable". One such company, DCM services, manages collections on more than $1 BILLION in deceased debts/year.
Debt amongst Americans between the ages of 65 and 74 is growing faster than for any other age group. The median debt level for that age group is $40,130, up from $27,458 in 2004.
In an FTC investigation, thousands of collection calls between collectors and mourners were monitored. Some debt collectors mislead relatives into believing that they had to pay. Despite that, the FTC recently relaxed guidelines surrounding debt collection: where before collectors were supposed to discuss the dead's debt with a spouse only. Under the new rules, the collection firms may now discuss the debt with anyone believed to be handling the estate, including spouses, siblings, children friends and neighbors.
What do you think? Would you feel a moral obligation to repay your spouses (or parents, or childs) debt upon their death? Do you believe that the process of seeking restitution from those not legally obligated to repay the debt is fair or right? Do you believe that if this was made illegal creditors would be unwilling to lend to the aged or the infirm? Thoughts?