Till death do us part…

That is the note on which the marrying couple’s vows end… oh yes, not to forget the kiss that binds both partners. But, when either one of the couple dies, the marriage “contract” ends.

However, I’m now referring to debt after death, which can be akin to the kiss of death… this happy couple’s story takes a different turn. It seems death won’t stop the debt collectors; here’s how… Let us say you (alone) signed a contract with a credit card company. Your contract to honor the terms and conditions laid by the credit card issuer does not end when you die (I won’t say “if” because death is inevitable… at least until science defies it, or someone finds the Holy Grail, either of which eventually lead to eternal living), i.e. not legally speaking.

Surprised or shocked? For me it was indignation at these mercenaries. No matter how well you may have fulfilled your end of the contract – until you were alive, your thus far good record is of little consequence… at least not to the credit card issuer, when you’re dead! Rest assured, they won’t come after you, digging up your grave – that won’t serve their purpose; and naturally, they will not grieve the fact that you’re gone – it means a loss of an account to them. But guess what, they will certainly go after your loved ones (survivors, if you will) who are perhaps grieving your death, or just going about their life, because life must go on. Not to pay their condolences, nor to express sympathies, but to chase you for “collections“, these creditors will call your loved ones! You read it right… either they, or their collection agency, will hound your survivors to pay up the balances which you would have owed them (and paid up) if you were still alive. Now again, if it’s a joint account, the “follow-up calls towards collection efforts” may make sense, but what if you were the sole cardholder with no supplementary or add-on names to your card? Is it your survivors’ responsibility to clear your debt/s (whether or not it is affordable to them)? The credit card issuers are not concerned about your death, but are worried about your debt which you failed to pay off – every last penny – before you died.

Don’t credit card companies build in the cost of such “untimely” deaths causing “bad debts” in their cost of doing business e.g. interest rates, or  late fees, or finance charges… so as to spread it across the board? Just like the insurance companies do something like that in their “pricing of premium/s” (I would guess some kind of averaging is done, based on statistics and such)?

Did this pique your interest? Well, for details on whether or not your survivors are legally bound to pay up, and the psychological mind games credit card companies play, and how they train their call center reps to carry out this nauseating task, read the article along with readers’ comments in The New York Times. It is indeed an eye-opener about what could happen after your eyes shut for the very last time.

It’s ironic that we, the tax-payers, the people, the borrowers must save the financial institutions from dying even after they’ve bungled up while they were alive and kicking… and with their eyes wide open. Although unpalatable, Fed Chairman, Ben S. Bernanke did have a point when he spoke yesterday…

“A.I.G. exploited a huge gap in the regulatory system,” Mr. Bernanke said. “There was no oversight of the financial products division. This was a hedge fund, basically, that was attached to a large and stable insurance company.” And this quasi-hedge fund, Mr. Bernanke went on, to nobody’s surprise, made irresponsible bets and took huge losses.

“We had no choice but to try to stabilize the system because of the implications that the failure would have had for the broad economic system,” he said.


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