We have already seen how one state can put people in prison for failing to pay their court fees.
With new powers being given to debt collectors by the FTC, we will see more and more people affected by the delinquency of those burdened by debt — even those who have no direct relation to the person in debt.
The new rules allow for a wider circle of people to be contacted, beyond family members and the legal executor of the estate. There is also the term “spouse” that some advocates say is inaccurate as a marriage ends when one of the partners dies. The Washington Post reported Monday.
Imagine the scenario — the grieving widow is contacted by a debt collector and told that she now has the responsibility of paying the debt of her late spouse, even if she had nothing to do with the debt being acquired to begin with. Not only does she have to deal with expenses of the funeral now, but she has to shoulder this unimaginable debt as well.
The collectors want to reach out even further, though — to the friends of the late debtor.
Some advocates warn that some debt collectors will press even friends to pay the debts of someone who has died, using a “moral obligation” argument, the Post said.
Robert Hobbs, an attorney with the National Consumer Law Center said the FTC should “strengthen protections for grieving families and friends, not open the door to debt-collection efforts.”
Do we have any moral obligation to pay for the debts of our friends? Is it not a greater obligation to help them prevent getting into debt in the first place? If a friend tells us that he is planning on buying a fourteen thousand dollar record player when they make only twenty-six thousand dollars per year, do we not have an obligation to tell our friend to not make such a ludicrous purchase? Is that beyond the scope of our friendship?
I can’t imagine these changes the FTC wants would go through. You’d have to change the underlying law about shared debt. If a husband has a credit card balance alone in his name and he dies, I can’t see how the wife could ever be made to pay it.
I’ve read about debt collectors reaching out to debtors to “Friend” them on Facebook and then harassing them and the friends of the debtor to get paid. If it isn’t illegal, and it isn’t, it’s all fair game. Don’t friend strangers on Facebook if you know you owe people money.
I don’t think it’s our job to police the purchasing habits of our friends. Their life belongs in their own hands, and if they can fool someone into giving them credit they do not deserve, then that’s between the debtor and the foolish lender.
Glad you agree with me on policing friends’ purchase habits. I mean, if someone outright asked me if I thought they should buy something out of their comfort zone, I would advise accordingly, but I wouldn’t run over to stop someone without their asking.
Also glad that the changes would likely not happen!
I don’t like this at all, Gordon. Don’t give money to people who are bad risks and if the risk fails, it’s more your fault than the one defaulting. Nobody wants to take on the risk anymore. Everything has to be a 100% guarantee.