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Dealing with Illness or Death Debt

Losing a family member or friend to death is a very traumatic experience that we all deal with at one point or another in our life. It’s just as difficult when you are dealing with someone who is seriously ill and in the hospital. You are more concerned with visiting them in the hospital or dealing with funeral arrangements than sorting out their finances and making sure that all of their bills – and your own – are paid. However, you are going to have to address these issues before long.

When someone has passed away or is seriously ill, the best course of action is to let the lenders know what is going on. You are going to want to do this via a written letter explaining the current situation and telling the lenders who you are in relation to the debtor. You are going to also want to make sure you include contact information in your letter so that the lenders can get in touch with you if they need to discuss further details of the account with you. It is a good idea to make sure that the person who is ill or who passed away gives you power of attorney to deal with the bills if you are not their spouse, parent, or other authorised person.

  • Most lenders are sympathetic to the circumstances that you are involved in, and they are usually more than willing to help you figure out some form of financial arrangement with minimal problems. They could offer lower payments for someone who is seriously ill and not receiving their usual pay, and many creditors are willing to keep payments very manageable during this awkward time. Regardless of whether or not the person is ill or has passed away, alerting the creditors to what is going on is a priority.

    To find out what debts the person has if they do not have all of their bills in order you can contact the credit reference agencies for a list of their existing debts, who they are with, how much the payment usually is for and who it is paid to. Once again you will need to write the credit agency a letter explaining what is going on and how you are related to the debtor so that the credit agency will release a copy of the record to you.
Protect yourself and your loved ones by making a will and a list of financial commitments for them to use to keep your finances up to date on your behalf. Add to the pile a copy of your credit record so that whoever is handling the bills on your behalf can easily keep track of what needs to be done. Put all of these important documents someplace where they can be found and if you need to, add the person’s name to your credit account so that they are immediately authorised to make payments and discuss your account with them.
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