The death of a loved one is a sad time under any circumstances, and it can be a stressful one if you have been tasked with administering the estate. However, what if you find out that the deceased had considerable debt? What are your responsibilities?
Surviving relatives of a person with debt have rights under the Fair Debt Collection Practices Act. That law is enforced by the Federal Trade Commission. The FDCPA makes it illegal for debt collectors, including collection agencies, companies that buy debt and attorneys, from using unfair, deceptive or abusive practices to collect money owed by a deceased person.
So are you obligated to pay the debts of a deceased family member? If there's not enough money in the estate to cover them, you generally aren't.
Debt collectors should only be contacting the executor or administrator of the estate -- not other family members. If you have one of these roles, it's a good idea to work with debt collectors to resolve the issues if you can. However, it's also important to make sure that these debt collectors are legitimate. Sadly, some people scan the local obituaries and look for opportunities to steal money from grieving relatives by telling that that their loved ones owed money.
If you've been contacted by debt collectors after the death of a loved one, you should consult that person's estate planning attorney immediately. If your relative didn't have one, you can seek the guidance of an experienced New Jersey attorney. You want to abide by any legal obligations that the estate has to pay outstanding debts. However, you don't want to allow your loved one to be taken advantage of after death.
Source: FindLaw, "Paying the Debts of a Deceased Relative: Who Is Responsible?," accessed May 05, 2017