Can a Debt Collector Come After the Power of Attorney After a Death?

By Teo Spengler

A creditor, who has lost patience with a debtor, may bring in a debt collector to assist him in collecting the money due. Debt collectors have a legal right to contact a debtor or an agent for the debtor acting under a financial power of attorney. Once the debtor dies, however, both these options are foreclosed.

Financial Power of Attorney

A power of attorney is a legal document under which a person termed a principal gives someone authority to make financial or medical decisions in his place. The authority of the agent is described in the document. It can be limited, like the authority to sell the principal's car, or general, giving the agent the power to take any action the principal could take himself.

Durable Power of Attorney

Generally, powers of attorney expire if the principal becomes incapacitated. However, a durable power of attorney gives the agent authority to act even after the principal becomes incapacitated. All powers of attorney, however, expire at the death of the principal.

Ready to appoint a power of attorney? Get Started Now

Creditor's Remedies

If a debtor dies, a creditor cannot sue the debtor's agent under a power of attorney, since the document expired at the principal's death. Instead, he may present a claim against the debtor's estate in probate court.

Ready to appoint a power of attorney? Get Started Now
Can You Include Returned Checks in Chapter 7?

References

Related articles

How to File Bankruptcy With Unsecured Debt

Many people who file for bankruptcy do so because they seek a financial clean slate and relief from a heavy debt burden. Whether you file under Chapter 7 or Chapter 13, the court can discharge – or erase – many of your unsecured debts at the end of your case. Your eligibility to file bankruptcy is not affected by whether your debt is secured or unsecured.

Can the Trustee Freeze My Bank Account During a Bankruptcy?

Individual debtors often file for chapter 7 bankruptcy. Once a debtor files the bankruptcy petition, a bankruptcy trustee is assigned to the case and one of his duties is to collect a portion of the debtor's assets, including bank accounts, and use them to pay his debts. Prior to seizing money from a bank account, the trustee first freezes the account to preserve the funds; however, sometimes banks will do this on their own.

Assuming a Mortgage With Power of Attorney

While state laws regarding powers of attorney vary, a power of attorney can allow one person to conduct financial transactions on another person's behalf. This may include the power to buy and sell real estate. The power of attorney may also include the power to assume a mortgage held by another person.

Related articles

What Constitutes Fraud in a Bankruptcy?

Bankruptcy proceedings allow businesses and individuals to reorganize or eliminate their debts. The United States ...

Legal Rights After Chapter 13 Dismissal

A chapter 13 bankruptcy can allow someone under extreme financial pressure the breathing room needed to reorganize his ...

How Does the Bankruptcy of a Trustee Affect the Trust?

A trustee's declaration of bankruptcy can harm the interests of trust beneficiaries if the trust instrument empowers ...

Pros & Cons of Filing Bankruptcy

Individual debtors frequently file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code, and either ...

Browse by category
Ready to Begin? GET STARTED