Wednesday, August 14, 2013
Can debt collectors take your inheritance? No. collection agencies can not take your inheritence. Be aware, creditors do have the right to sue in court to try and collect the debt owed.
Dear Credit Guy, My father passed away recently and I was left money from my his estate. Now, I have old creditors from many years ago calling again. Do the creditors have the right to come after what was left to me from my fathers estate? Thank you. -- Holly
Todd Ossenfort: Dear Holly
No, the collection agencies can not take your inheritence. Be aware, creditors do have the right to sue in court to try and collect the debt owed. If they should win, the courts can award a judgement agains you. With a judgment, the creditor can petition the court for wage garnishments or bank account levy orders or to place a lien on real property owned by you.
However, for the creditors to rightfully collect the debt, the statute of limitations (SOL) in your must not have expired. To determine the statute for your state, read the CreditCards.com article "State statutes of limitation for credit card debt." Ther are only a few states that have statues longer then six years. They are: Montana, Wyoming, Iowa, West Virginia and Rhode Island.
It is likley that after six years, it is the collection agencies that are trying to collect rather then the creditors themselves. Collection agencies are contracted to collect the debt, if they locate the person and collect the debt, they get paid.
Therefore, if the collector hasn't already obtained a judgment against you, then your inheritance should be safe. I also recommend that you get a free annual copy of your credit report from the thre major credit bureaus. This way you can stay infomed about your credit score, credit histroy and any judgments tha might be against you. If a judgment has been issued, it will be listed in the public records section of the credit report.
I highly recommend that you try and pay off your debt. You might want to take into consideration using some of your inheritance to pay off the debt. You may be able to come to an agreement with the credit collection agency for a smaller amount to pay off the debt.
Make sure you cross your t's and dot your i's and get the agreement in writing before you pay off the debt. That way you are covered and have proof of the settlement and payoff. This will also serve as proof if you try and get credit in the future and it is not off your credit score.
Take care of your credit!
Guarding against collection agencies and your inheritence.