Saturday, July 19, 2014

Can You Tell Debt Collectors That You're Dead?

Debtors have a myriad of ways to avoid paying collection agencies, but being dead has to be one of the most effective. Out of the myriad of ways debtors have to avoid having to pay debt collectors, being dead has to be one of the most effective. A debt collector could come knocking at the pearly gates, sure, but nobody would let him in.
He'd be directed to the other know, the one peppered with lawyers, IRS agents and everyone who has ever worked at a DMV?

Yep. That line.

All kidding aside, if you're carrying a heavy debt load there are some definite benefits to being dead. Depending on your state of residence, death hinders the collection process considerably--making it an appealing excuse for frustrated debtors. Although the excitement is practically oozing out of your ears at the prospect of creating your own online tombstone, you should probably take the following into consideration before you break the news of your untimely demise to any debt collectors

Debt Collectors Probably Won't Believe You're Dead Without Proof

A seasoned debt collector has heard it all. Any excuse you can come up with, he or she has already fielded. The "death" defense isn't as brilliant or unique as it may seem in your head. But sometimes the story is true. After all, people die every day (40,000 if we're to believe Blue Oyster Cult). To weed out the fakers from the actual deceased, the collection agency will probably request a death certificate. And don't bet on them waiting a reasonable amount of time for the elusive death certificate to arrive. They'll likely just continue calling and asking for you--dead or undead. 

NoteFamily members of actual deceased debtors are not required to send the collection agency a death certificate. Many just send a "my loved one passed away, do not contact us again" sort of letter which falls into the "Cease and Desist" category. So, theoretically, your failure to send the debt collector a death certificate isn't proof that you're actually still alive. 

Telling Collectors You're Dead May Constitute Fraud 

Nobody wakes up in the morning, stretches and then says, "Today I think I'll go commit some fraud so I can get me one of them swanky rooms at the County jail." Unfortunately, your seemingly innocent tactic for avoiding debt collectors could potentially land you in some serious legal trouble. 

Just to clarify, I'm not saying that telling a debt collector that you're dead is blatant fraud and will land you in jail. The chances of that are painfully slim. Debt collectors hear the "I'm dead" excuse more often that you think. Even if the collector, upon finding out that you are very much alive, calls the authorities and throws a Miss-Piggy-backstage calibur hissy fit, any evidence the collection agency has against you is circumstantial at best. But I have to make you aware that the possibility exists. It is possible that the debt collector can make a fraud claim and it is possible that the D.A. would move to prosecute. It is very unlikely, but it is possible

You're not truly tap-dancing with trouble unless you've created a forged death certificate to "prove" your alleged death to the collection agency. The irony here is that the consequences for the collection agency believing your story and writing you off as deceased are just as foul as the consequences you'd face in front of a judge. 

Bad Things Happen When the Credit Bureaus Think You're Dead

Once a creditor receives confirmation from your family members that you've died--usually via a death certificate--the creditor will notify the credit bureaus. The credit bureaus will then note that you are deceased. Once this occurs, you can't pull your credit and neither can lenders. All credit activity stops. I've never tried convincing the credit bureaus to bring one of my clients "back to life," but from what I've heard, reclaiming your credit when the credit bureaus think you're dead is a frustrating and nightmarish process. 

Stop Collection Calls Without Claiming to Be Dead 

No matter how simple the idea sounds in your mind, telling debt collectors that you're dead and convincing them of that fact takes some serious planning on your part. The end result? They start doggedly pursuing your next of kin (or in this case, they're doggedly pursuing you who have been, up to this point, pretending to be that next of kin). So the debt collectors are still calling and, since they've reported your death to the credit bureaus, your credit report is POOF! Gone. 

That's not the scenario you were hoping for, is it? Nope, didn't think so. If the collection calls are truly driving you insane, you can make them stop simply by sending the collection agency a cease and desist letter. (If the debt in question is still within the statute of limitations for debt collection lawsuits, make sure to only restrict debt collectors from calling you on the phone, not from contacting you in general. If you give a collector no way to contact you, its only option is to sue.) After receiving a Cease and Desist letter, federal law requires debt collectors to back off and let you peace. 

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