Tuesday, February 10, 2009

Guardianship, conservatorship, and related concepts: who can handle and even be told about a senior's debts; a tricky area in the FDCPA

In 2003, I was working as a debt collector, and ran into a situation where someone who answered a call said that they were taking care of the debtor. I won’t go into details or specifics here (confidentiality, etc), but my boss, who was monitoring the call, got after me for not specifically asking the person who answered if she were the adult’s legal guardian.

A bit more background here: according to the Fair Debt Collection Practices Act (FDCPA), it’s illegal for a collector to tell a third party about the debt. However, in the law, a legal spouse is considered part of the same “person”, and so is a parent of a legal minor, and so is a legal guardian of an adult. (A few states, notably Massachusetts, have laws that override this concept. Also, in any state that recognizes same-sex marriage, it’s a good question as to whether the legal same-sex spouse would be part of the same “person” for federal FDPCA purposes – maybe someone knows.) An administrator or executor of an estate, or the person’s attorney, can also be part of the “same person” but the collector must “ask” first before informing the party about the debt.

For seniors, there is an implication here. If the senior has an unpaid debt and an adult child or other caregiver lives with him or her, that caregiver might take the call. The collector cannot identify the debt to the caregiver, even an adult family member, unless the family member has been appointed a legal guardian by a court.

The FTC reference for the FDPCA is here. Look particularly at section 805. Debt collection companies should train their new employees on this specific point before they start work (they generally don’t). You can paste this URL into your browser for another interpretation ("http://forum.freeadvice.com/debt-collections-84/fdcpa-violation-not-231401.html"); for some reason, if the URL is directly hyperlinked I get Apache errors.

In the “guardianship” area there are several terms and concepts, such as guardian (limited or full, and standy), conservator, guardian ad litem, incapacity, and incompetence. Virginia’s laws are fairly typical and are laid out here. Or, for example, you can look at Illinois, here.

Guardianship is a major responsibility, comparable to custody, and established by a court, and it can have implications for the guardian, including financial responsibility and other areas of behavior and reputation (even the nettlesome “online reputation”). Typically, a state social services department (or court) checks on the guardian. Often conservatorship also requires court supervision but may be less demanding. Guardianship can also give the guardian some “authority” that he or she may need in practice. In states that have filial responsibility laws, adult children might have a reason to believe that they should seek guardianship or conservatorship status to cover their potential financial exposure (particularly if states start enforcing these laws due to the current financial crisis or because of future public policy changes in areas like “earned” entitlements) Guardianship could be a daunting prospect for adults who did not have their own children or never had custody of or family authority over anyone (like a younger sibling) in the past for some other reason. It would force them to live through a family unit (that they must take responsibility for) that they did not create by choice, and without their past sense of individuality. This seems to be a troubling area in our social fabric that is growing with both demographics and the economic crisis. But courts usually only approve arrangements that they believe are necessary and appropriate for the individual people involved.

The Department of Social Services Regulations for the Commonwealth of Virginia are here. Pay particular attention to Virgini code 18.2 369 with link here. Admittendly, there is some room for interpretation which might require a lawyer; how "responsible" legally is someone who is not formally appointed as a guardian?

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