topic | gather information, make notifications

Step 4: notify creditors

Specific creditors must be notified directly, and a legal notification must also be published in local newspaper. When creditors are contacted, actions should be taken to close an account, change the name on an account, determine what is due, stop collections, and prevent fraud. Creditors may be contacted by phone, email, or by mail. Consider consulting a credit counselor for assistance.

Creditors may include:

  • credit card companies
  • mortgage lenders
  • car loan institutions
  • other providers of credit

Activity 1
Publish a Legal Notification to Creditors

The probate court should supply the notification requirements for known and unknown creditors through publications such as the newspaper. Requirements for publications may vary by county or state but may include:

  • number of publications required
  • range of time they must be published
  • where the ads must run (local newspapers)

Retain proof of this publication. It will be necessary to close the estate.

Activity 2
Gather Information, and Make a List of Creditors

Names and contact information for the deceased will be needed. Loans or Accounts may already contain this information. Also required is their date of birth and Social Security Number. Personal Information may contain this information.

The surviving spouse, the sole heir, or a joint owner of the account may already have access to the account. No court-appointed documents are needed. If there is no surviving spouse, creditors may require proof of death (death certificate) and your authority regarding the estate (executor's Letters of Administration).

Activity 3
Notify Creditors and Make Cancelations

Begin with critical accounts such as overdue loans, car loans, mortgages. If contact is made through email or a letter, Creditor Notify or Creditor Collect may be used as a resource. Retain copies of all written correspondence. They will be required when the estate is closed.

Request information on the account including:

  • exact name on the account
  • account number
  • balance and due date
  • payment method (check, debit, direct deposit)

Request written verification of the following:

  • account balance
  • closure of the account
  • An account cannot be closed until any outstanding balance has been paid. If this is the case, request that the account be frozen.
  • any name changes on the account

Determine if the account balance can be canceled.

  • If estate funds are small or non-existent, the account probably will not be paid.
  • If the balance due is low, the creditor may be willing to close the account without payment./li>
  • If credit collectors are involved, Creditor Collect may be useful in explaining the inability to pay debts.

Best Practices

Report the death to the credit reporting agencies: Experian, Equifax, and TransUnion.
  • List the credit report as “Deceased, Do not issue credit.”
  • Request a current credit report. Use it to identify credit
    companies that need to be contacted. Credit Report Notify
    may be used as a guide.
If there is a surviving spouse:
  • Rename the accounts that the spouse will keep. If the name
    cannot be changed, close the account and open a new account
    in the spouse’s name.
  • Unsecured debts held in the deceased’s name only are not
    owed by the spouse
. However, the estate may be held liable
    (refer to the Topic: Opening Probate)
If the estate insolvent, consider writing a formal letter informing creditors of this situation. Include a copy of the death certificate and court-appointed papers. An estate attorney may help with this task.
The executor is responsible for paying off liabilities of the estate. Wait until estate funds are available. If money is spent before estate funds are available, keep track of what is spent to facilitate reimbursement.

(if this Step is complete)
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