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When a loved one passes away, the last thing surviving family members want to be concerned with is whether or not all of their loved one’s debt is paid. However, along with grieving the death of a loved one, Florida families may be required to address their deceased relative’s financial issues and unpaid debts with creditors.

The past few years have been tough on Florida residents, resulting in many individuals defaulting on their loans and other bills. Many Florida residents may discover that their loved ones who have died have also left some debt behind. Although lenders do have a right to pass on past due accounts of the deceased to collections agencies, family members should not have to deal with creditor harassment regarding a deceased relative’s unpaid debts.

Last month, the Federal Trade Commission published an updated policy statement regarding collection practices, specifically outlining whether or not collections agencies can go after relatives of a deceased individual in an effort to collect money.

The policy states that collections agencies and lenders can only communicate with a spouse or another individual who is authorized to handle the estate of the deceased person. Debt collectors cannot discuss debts with any other relative who is not a spouse or who is not authorized to make payments from the estate of the deceased.

In addition to the FTC’s clarifications regarding collections practices, the FTC did state that debt collectors cannot attempt to threaten family members by making them think that they are responsible for paying their deceased relative’s debts.

Our Miami bankruptcy law blog will continue this discussion later this week, focusing on how family members can respond to debt collectors regarding a deceased relatives debts and whether or not a family member could be held liable for the unpaid debt.

Source: Federal Trade Commission: “FTC Issues Final Policy Statement on Collecting Debts of the Deceased,” July 20, 2011