Dear Debt Adviser,
My husband acquired a retail store credit card and was the only named user on the card. Sadly, he passed away in November 2009 of lung cancer. Due to loss of income, I discontinued making payments at that time. Recently, a collection agency has contacted me and is trying to settle the debt, going so far as to threaten an investigation with regard to assets and against property ownership. What they don't seem to realize is that (we) I rent our home. My question is -- what is my responsibility to this account, especially since I am not a named user? I would be so appreciative if you could answer this question.
My condolences on the loss of your husband. The issue here is not one of renting or owning a home, but of debts, assets and ultimately, the law in your state. My first thought is that since this is a retail card, the balance most likely is relatively low. Relatively low compared with a bank credit card with a $50,000 limit or a car loan for thousands of dollars. Typically, retail stores issue cards with a limit of between a few hundred to a few thousand dollars. So, the debt in question is probably small.
The Debt Adviser's quick tips
- Determine if you're in a community property state.
- If not, cease communications.
- If you are, negotiate a deal you can afford.
A debt collector has the right to do what is called an asset search as part of the collection process. Credit cards are unsecured, except possibly by the merchandise you purchased with the card. But who wants a two-year-old suit back? So, a collector will look for assets that belong to the responsible party and are likely to be sold at some point.
Through the courts, the collector may attempt to put a lien on that property, which will assure them of their payment in the future. This is time-consuming and expensive, and no collector wants to be paid in 10 years for a current debt. So, unless you owe enough to make this exercise worthwhile, it may not get past the talking stage. Plus, chances are that after nearly two years, there are no assets remaining in your husband's name. If no assets remain, I recommend that you let the collector know that your husband is deceased and that you will send them a copy of his death certificate. Then follow through and send them the certificate certified mail with a return receipt request.
That being said, in the vast majority of states, you would not be responsible for the debt. However, if you live in a community property state, the collector may still have some recourse. Under community property rule, a debt incurred by either party during a marriage is considered to be a joint debt. If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington or Wisconsin, you may be liable for the debt personally. If you live in Alaska, community property is optional.
Regardless of the facts, the collector will likely try to get you to promise to pay for the debt. If you are not in a community property state, you can tell the collector that you know you are not responsible and that you do not wish to be contacted about the debt again. The Fair Debt Collection Practices Act prevents the collector from any further communication directly with you regarding the debt once you have told them you don't wish to be contacted. Should the collector disregard this regulation, report the company to the Federal Trade Commission. And then stop taking their calls.
You might be contacted by an attorney regarding the debt once you tell the collector to stop communicating with you. Should you be contacted, you will just need to go through the same procedure. Send the attorney a copy of your husband's death certificate and explain that there are no funds or assets in the estate to satisfy the creditor.
Should you actually owe the debt because you live in a community property state, offer a monthly payment you can afford or ask for a lump sum settlement that is within your means.
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