Late fees on a deceased person's medical debt?

[SilentJim]

What is the name of your state (only U.S. law)? Arizona

My mother passed away, and several months later I received a huge medical bill. I serve as personal representative for the estate. Needless to say, there was not enough cash in her estate to pay it. The value of her estate is tied up in her house. I arranged an estate sale, and put the house on the market. (I was going to do this at some point, but this bill expedited my decision.) The house is currently under contract, and the sale will close shortly. I fully intended to pay off the medical bill once the house was sold, but a few days ago, I received a second bill that charged a significant late fee. Can they charge late fees on a deceased person's debt?

 

[xylene]

What is the name of your state (only U.S. law)? Arizona

My mother passed away, and several months later I received a huge medical bill. I serve as personal representative for the estate. Needless to say, there was not enough cash in her estate to pay it. The value of her estate is tied up in her house. I arranged an estate sale, and put the house on the market. (I was going to do this at some point, but this bill expedited my decision.) The house is currently under contract, and the sale will close shortly. I fully intended to pay off the medical bill once the house was sold, but a few days ago, I received a second bill that charged a significant late fee. Can they charge late fees on a deceased person's debt?

How did you respond to the original bill?

 

[Zigner]

What is the name of your state (only U.S. law)? Arizona

My mother passed away, and several months later I received a huge medical bill. I serve as personal representative for the estate. Needless to say, there was not enough cash in her estate to pay it. The value of her estate is tied up in her house. I arranged an estate sale, and put the house on the market. (I was going to do this at some point, but this bill expedited my decision.) The house is currently under contract, and the sale will close shortly. I fully intended to pay off the medical bill once the house was sold, but a few days ago, I received a second bill that charged a significant late fee. Can they charge late fees on a deceased person's debt?

You received a bill, or your mother received a bill?
Have you contacted the medical provider at all about this? You may be able to come to arrangement to get the late fee waived. Also, did your mom have any type of medical insurance that would/should cover this? (I imagine not, or you would have explored that option already.)

(I'm sorry for your loss.)

 

[SilentJim]

The bill was addressed to my mother. I had her mail re-routed to my address. This pertains to a medicare co-pay. The vast majority of the amount was covered.

I have had strange dealings with the company that sent me the bill. About 3 months after she passed, I got a large bill. She never received a bill from them like this before, or I would have heard about it. I called the company, and they said it was sent in error. I did not owe anything. About 3 months after that, I get this much larger bill (which included the charge they said was sent in error). I called them up again, and they said that in fact the amount was due. The operator made a deal which split the charge into 3 payments. Still, the estate could not afford it. This is when I put the house up for sale. A few days before the first of the new payments would be due, I get another bill in the mail for the full amount. Obviously there is some confusion on their part. The house had yet to close by the time the bill was due, so I got the new one with the late fee.

Compared to the value of the house, the bill and the late charge are relatively insignificant. I was just curious about the late fee. I wasn't sure if they could legally do that. If I have to pay, I will. I remember when I dealt with her credit card debt, they couldn't charge interest.

 

[Zigner]

I remember when I dealt with her credit card debt, they couldn't charge interest.

That's not quite correct. If the administrator of the estate asks for the balance due and pays that balance within 30 days, then the credit card issuer can't accrue interest for the period of time from when the balance was requested and payment was received.

 

[justalayman]

I remember when I dealt with her credit card debt, they couldn't charge interest.

You've been misinformed. A contract such as a credit card debt continues on after death pretty much unchanged than before death. Unless the contract included some terms that altered the situstion in the event of the death of the debtor, interest and even late fees continue to accrue just as if the creditor was alive.

 

[Zigner]

You've been misinformed. A contract such as a credit card debt continues on after death pretty much unchanged than before death. Unless the contract included some terms that altered the situstion in the event of the death of the debtor, interest and even late fees continue to accrue just as if the creditor was alive.

...with the caveat I mentioned above

 

[SilentJim]

Maybe I was wrong. When I called the credit card company way back then, the lady said there would be no interest or late fees. When I got the next month's statement, the area that said "If you continue to make minimum payments..." it should take X number of months and you'll pay this much extra. Well, the amount shown was the same as the current balance. I figured I had plenty of time to pay this off, so I sent in the minimum. The next month, I get a letter from a collection agency and I had to pay the whole thing. Go figure.

So, I take it I'm out the late fee on the medical bill.

 

[justalayman]

The late fee, to be enforceable, has to be in the original contract. Same thing with interest charges. If not in the original contract they can't unilaterally and arbitrarily impose them later. So far that is the only possible out you have available.

 

[HRZ]

DOuble check one other line of logic....IF as. Administrator you published proper notices in two newspapers than about 4 months later it may be TOO LATE for a creditor to enforce payment of an estate debt with any new or expanded bills