No one enjoys receiving calls from debt collectors. While some collectors are professional, many can be rude, aggressive, and difficult to work with. Thus, many people are immediately suspicious of anything a debt collector might tell them or any action they may attempt to convince a person to take. In some instances, this suspicion is well-founded. At least some debt collectors violate the rules and regulations set forth by the Federal Debt Collection Practices Act (FDCPA) and other relevant laws.
In many cases, debt collectors will attempt to get a family member to pay the debts of another member of the family. The debt collector may call someone and state that (s)he is legally obligated to pay the debt. While there are certain situations in which a family member can be liable for the debt of another person, in at least some cases, this type of statement is false and misleading. This type of statement is likely grounds for a lawsuit, but individuals who fail to realize that they are not liable for most familial debts may mistakenly assume liability. Contact a Sacramento bankruptcy attorney of The Bankruptcy Group for more information if you’re concerned about debt or debt solutions.
California’s Community Property Regime Means a Surviving Spouse Can Be Held Accountable for Marital Debts
As a general rule, you are not responsible for the debts of your family members. However, one of the chief exceptions to this rule is introduced by California’s community property regime. Under the community property regime, the debts and assets a spouse accumulated prior to the marriage is typically “separate property,” and solely the responsibility of that spouse. By contrast, debts and assets accumulated during the course of the marriage are considered “community property” and are equally the responsibility of both spouses.
Thus, under California Probate Code sections 13550 and 13551:
…Upon the death of a married person, the surviving spouse is personally liable for the debts of the deceased spouse chargeable against the [following] property”:
(a) one-half of the community property belonging to the surviving spouse, except the property that is exempt from collection under California law;
(b) one-half of the community property belonging to the deceased spouse; and
(c) the decedent’s separate property that does not pass through probate.
Essentially, this means that the spouse can be held liable only for community property debts. He or she cannot be held liable for the separate property debts of the deceased spouse. Furthermore, the surviving spouse can only be held liable to the extent of community property shared by both spouses and the separate property of the deceased spouse. The creditor may not seize or otherwise claim the separate property of the surviving spouse. This is probably the most common scenario where an individual may be liable for a family member’s debts. However, there are limits to this potential liability and a prenuptial agreement can allow the spouses to avoid this type of liability altogether.
Family Members Who Sign a Guarantee or Assume Payments for Debts Often Mistakenly Create Personal Liability
In another scenario, an individual may not have any liability to pay the debts of a brother, sister, mother, or father. Still, the individual could believe a debt collector’s statements that they are liable for the debt and decide they will make payments on it. In many cases where creditors seek a family member to take responsibility for the debt, the statutory collections period has already elapsed and the debt is not collectable. However, making a payment on a debt that is past its statutory collections period can be viewed as a reaffirmation of the debt and personal liability can attach.
Another scenario where a family member may be liable for another family member’s debt involves personal guarantees or co-signer status. If you have signed a legal agreement stating that you are also responsible for a debt, it is highly likely that you are legally obligated to pay the debt if the original party is unable to do so.
Sacramento Bankruptcy Attorneys Can Assess Your Debt and Determine Whether You Are Liable
If you are concerned about excessive debts, frequent calls by bill collectors claiming that you are liable for a family member’s debt, or any other debt concerns, the attorneys of The Bankruptcy Group may be able to help. For those facing excessive debts, we can explain the various bankruptcy and non-bankruptcy solutions. To schedule a free and confidential consultation and find out more about debt relief solutions in California, call 1-800-920-5351 or contact us online.