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  1. #1
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    Jan 2017
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    Default How to Dispute the Credit Card Debt of a Deceased Person

    My question involves collection proceedings in the State of: NY

    My mother went into a nursing home and I took over her finances as POA. I found out that there were charges made on her credit card while she was in the nursing home and when I contacted the credit card company they refused to speak with me and would not accept the POA. I refused to pay until I could confirm the charges were hers. She is now deceased. We are getting ready to distribute her assets to the heirs and still have not paid the credit card bill because they still will not provide any information. Does the credit card company have any recourse against me if I distribute her assets leaving no resources to pay the bill?

  2. #2
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    Oct 2006
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    Quote Quoting taxcop
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    My question involves collection proceedings in the State of: NY

    My mother went into a nursing home and I took over her finances as POA. I found out that there were charges made on her credit card while she was in the nursing home and when I contacted the credit card company they refused to speak with me and would not accept the POA. I refused to pay until I could confirm the charges were hers. She is now deceased. We are getting ready to distribute her assets to the heirs and still have not paid the credit card bill because they still will not provide any information. Does the credit card company have any recourse against me if I distribute her assets leaving no resources to pay the bill?
    Yes, they would have recourse against you personally (assuming that you are the executor/administrator of the estate) if you do not pay off her debts prior to fully distributing the estate. However, at the same time, they are not permitted to refuse information to the executor/administrator of the estate, so their attitude there makes no sense.

    How much money are we talking about?

  3. #3
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    I'm not sure I agree. CC debt is an unsecured debt and I don't think there is any recourse against the executor of an estate. If this debt is for medical, the CC company may have an action against the estate but not the executor.

  4. #4
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    Quote Quoting budwad
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    I'm not sure I agree. CC debt is an unsecured debt and I don't think there is any recourse against the executor of an estate. If this debt is for medical, the CC company may have an action against the estate but not the executor.
    The executor is responsible for paying ALL debts of the estate prior to fully distributing the estate. Any breach of that is actionable.

  5. #5
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    No it isn't. It is actionable against the estate but not against the executor because of the Fair Debt Collection Practices Act. The credit card company has 7 months from the date probate is opened to file suit against the estate in NY. And CC debt is the last debt to be paid if there are not enough assets in the estate.

    And rather than suing the estate, most CC companies will take 50% or less on the dollar to settle.

  6. #6
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    Quote Quoting budwad
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    No it isn't. It is actionable against the estate but not against the executor because of the Fair Debt Collection Practices Act.
    The federal Fair Debt Collection Practices Act (FDCPA) does not say any such thing. The law in pretty much every state is that the executor is personally liable to pay the debts of the estate if the executor wrongly distributes the assets of the estate and that distribution harms a valid creditor of the estate. Thus, an executor who distributes assets to beneficiaries while leaving valid estate debts unpaid exposes the executor to personal liability for the creditors that got shortchanged by the distribution. The executor must notify all known creditors of the probate proceeding. If the executor did that and the credit card company failed to submit a proof of claim in the probate proceeding then the executor might be able to leave the credit card company out in the distributions, but he or she should consult the attorney he or she retained for the probate (and one really should have been retained if the estate does not have one) to make sure of that before making distributions.


  7. #7
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    Quote Quoting llworking
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    The executor is responsible for paying ALL debts of the estate prior to fully distributing the estate. Any breach of that is actionable.
    The administrator of an estate is responsible to provide notice to creditors, and is required to pay estate debts in their order of priority. If a creditor is given actual notice, or legally adequate constructive notice, of the estate proceeding and deadline for submission of claims, and does not submit a timely claim, the creditor may lose its ability to make a claim (or be treated as a lower priority debt if it successfully makes a late claim). The estate may negotiate with creditors in order to reduce the amount paid on debts.

    If an estate has been opened and the daughter has been appointed as administrator of the estate, she should not have a problem getting credit card statements from the creditor. If she is trying to get credit card statements without having letters of authority from the probate court, it is not surprising that the creditor is not giving her copies of the statements.

    When a claim is submitted to probate and the administrator denies payment of the debt, the creditor may file a motion with the probate court to enforce the debt.

  8. #8
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    Default Re: How to Dispute the Credit Card Debt of a Deceased Person

    Quote Quoting Taxing Matters
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    The federal Fair Debt Collection Practices Act (FDCPA) does not say any such thing. The law in pretty much every state is that the executor is personally liable to pay the debts of the estate if the executor wrongly distributes the assets of the estate and that distribution harms a valid creditor of the estate. Thus, an executor who distributes assets to beneficiaries while leaving valid estate debts unpaid exposes the executor to personal liability for the creditors that got shortchanged by the distribution. The executor must notify all known creditors of the probate proceeding. If the executor did that and the credit card company failed to submit a proof of claim in the probate proceeding then the executor might be able to leave the credit card company out in the distributions, but he or she should consult the attorney he or she retained for the probate (and one really should have been retained if the estate does not have one) to make sure of that before making distributions.

    Back to the original question and the idea that the executor may be held personally responsible for a debt of the estate, that can only happen in NY if a formal claim against the estate is filed within 7 months of letters being issued if the executor chooses not to pay. It must be a formal claim according to NY SCPA and responded to by the executor. Calling the executor or sending a letter to the executor does not meet that standard.

    New York Surrogate's Court Procedure Act § 1802. Effect of failure to present claim -

    If any claim is not presented on or before the day fixed in the notice published pursuant to the preceding section  [FN1] or if no notice is so published, within 7 months from the date of issue of letters, the fiduciary shall not be chargeable for any assets or moneys that he may have paid in good faith in satisfaction of any lawful claims or of any legacies or distributions to the legatees or distributees of the decedent before such claim was presented.  Such 7 month period shall begin on the date letters were first issued to any fiduciary, including a temporary administrator or a preliminary executor, and shall not be interrupted by any subsequent issue of letters, except that the time during which there is no fiduciary in office shall not be counted as part of such period.
    New York Surrogate's Court Procedure Act § 1803. Form and verification of claims;  service of notice

    1. Every claim against the estate of a decedent other than claims for expenses of administration and claims of the United States or the state of New York must be in writing, contain a statement of the facts upon which it is based and the amount thereof.  In addition the fiduciary may require the claimant to present proof by affidavit that the amount of the claim is justly due, that all payments thereon, if any, have been credited, that the claimant knows of no offsets and no evidence of indebtedness and holds no security, except as specifically described in the affidavit.

    2. The notice of claim required by this section shall be presented by delivering a copy thereof to a fiduciary personally or by certified mail return receipt requested addressed to the fiduciary at the place of residence stated in the designation required by 708 or if a notice has been published pursuant to 1801, [FN1] at the place specified therein or upon the clerk of the court pursuant to the designation required under 708 whenever the fiduciary cannot be found or served within the state after due diligence.

    3. No claimant shall be entitled to enforce payment of a claim in any proceeding in the court unless the claim be presented in accordance with the provisions of this section or unless it shall be based upon a decree or order of the court or a valid judgment rendered by a court of competent jurisdiction.

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