New Consumer Protection Rules: If Your Loved One Died In Debt

  • Estate Planning
New Consumer Protection Rules: If Your Loved One Died In Debt

In Illinois, you are generally not responsible for the debts of a deceased family member. However, if you cosigned for a loan you may be legally responsible. Additionally, the “estate” of the deceased family member must still pay its debts.

When a family member dies and leaves behind unpaid bills and other debts, family members are often contacted by debt collectors. Unfortunately, many family members of recently deceased are often harassed by debt collectors who were hired to collect on the deceased’s unpaid debts. New Consumer Financial Protection Bureau rules went into effect November 30, 2021, that provide more protections on how debt collectors can contact you when trying to collect on a debt. If your spouse or loved one dies and has debt, the new consumer protection rules can protect you from unlawful debt collection practices.

5 New Debt Collection Rules

These new consumer protection rules can protect you from unlawful debt collection practices if a loved one dies and has debt.

1. In addition to telephone calls and the mail, debt collectors are now legally allowed to contact you by email, text messages and social media.

• Debt collectors must provide you with a way to opt-out of being contacted via social media.

2. Debt collectors must identify themselves as debt collectors and have to message your privately. This means they cannot post on your public social media accounts that they are trying to collect a debt.

3. Debt collectors must tell you

• who is attempting to collect the debt
• the amount of debt owed including interest and fees
• the account number and other identifying information on the debt

4. Debt collectors are limited to contacting you 7 times in a 7-day period about a specific debt.

5. Before reporting you to a credit reporting company, the debt collector must speak to you by phone, in person or by mail or other electronic communications such as social media.

According to the Fair Debt Collections Practices Act,

“Family members – and all consumers – are protected by the federal Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt.”

If you are being harassed for your deceased family member’s debt by debt collectors, you can request they not contact you. If you feel the FDCPA is being violated and the new consumer protection rules are not being followed, you can sue the debt collection company and the individual debt collector for damages and attorney fees. However, there are time limits on suing for unfair debt collection practices so you should consult an attorney if you are being harassed for unpaid debt.

Under Illinois law, you are not personally responsible for your spouse’s debt when they die, but their estate is. The new consumer protection laws protect your rights against harassment by a debt collector. An experienced estate planning attorney can protect your rights and guide you through the process of closing your spouse’s estate.

Learn More:

FAQs: What Happens To Your Debt When You Die?
Am I Responsible for My Deceased Spouse’s Debt?

What To Do If Your Spouse Dies In Debt

Even though you are not personally responsible for your spouse’s debt when they die, the estate is. The estate cannot be closed and all the assets cannot be distributed until after all the debt is paid or discharged. If you are making a will, an estate and probate lawyer can help provide ways for your beneficiaries to be taken care of after your death. If you are a beneficiary to an estate with considerable debt, a probate attorney can help you settle the estate and work with the executor to protect your inherited assets and your rights.

If you are planning your will or your spouse has died and you are concerned about your rights, an experienced probate and estates lawyer can advise you throughout the process. To talk to a probate, trust and estates attorney in Chicago or Oak Brook, contact the Estate & Probate Legal Group at 630-864-5835. 

AREAS WE SERVE: Cook, DuPage, Kane, Lake, and Will counties.

During the COVID pandemic the Estate and Probate Legal Group will remain open to help you protect your family. Please see this page for specific actions to take