Harassed for the debt of a deceased family member

RIP-OFF ALERT: The collection industry continues to amass black eyes thanks to the latest actions of some of the giant banks.

Collectors working for a bank have special exemptions under the Fair Debt Collections Practices Act. Basically, they can do anything to collect on a debt except threaten to physically harm you, physically harm you or run afoul of state harassment laws.

CNNMoney reports collectors working for banks have been harassing people within days of the death of a loved one. In one instance, a Bank of America collector called a grieving widow 48 times in one day right after her husband’s death to collect on his debt.

If you’re being hassled, I want you to record the calls and then take those tapes to state or local authorities or to the media. That’s what happened in the Bank of America case.  The one thing that still works with the giant monster mega-banks is shame.

In most cases, you have no legal obligation to assume the debt of a late spouse, sibling or parent. But the collectors will never tell you that.

The only states where there is a possibility that a surviving spouse may have some responsibility for a debt are “community property states” — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

In such states, an executor/executrix or administrator (in the event there is no will) may be responsible for assessing the estate to see if there’s money to pay out to creditors.

But in general, if you get a call from these slimeballs, know that you likely don’t owe them a penny.

On another note, if you do legitimately owe a debt and want to make good on it, here are some things to keep in mind when dealing with bill collectors:

• If you’re going to pay, get it in writing that the payment you make will be considered payment in full. No money changes hands until you do that.
• Never give your checking account number or a debit card or credit card number. Doing so will allow collectors to clean out your account.
• Pay by money order only. It’s cheap insurance to make sure the collector only gets his or her hands on the money you’ve agreed upon and nothing more.