As soon as the deceased's estate enters probate, the creditor should submit a statement of claim to the court overseeing the probate or the executor of the estate. This statement will include the precise amount of the debt owed, the nature of the debt and the approximate date it originated. The executor will either accept the debt as legitimate or deny the claim. If the claim is denied, the creditor must sue the estate or abandon its collection attempt.
Statement of Claim
As soon as the deceased's estate enters probate, the creditor should submit a statement of claim to the court overseeing the probate or the executor of the estate. This statement will include the precise amount of the debt owed, the nature of the debt and the approximate date it originated. The executor will either accept the debt as legitimate or deny the claim. If the claim is denied, the creditor must sue the estate or abandon its collection attempt.
Probate
Once the executor of the deceased's estate has received all claims, he will inventory them and all the assets of the estate. If the estate has enough money to cover all its debts, it is consider solvent. Otherwise, the estate is considered insolvent. In the case of insolvency, the executor must determine the priority of all the debts, according to the laws of the deceased's home state. At the end of probate, the debts are paid in order of priority until the money runs out or all the debts are paid. After that, any money left is distributed to the beneficiaries.
Relatives
In most cases, relatives are not responsible for the debts of the deceased. This always includes parents, children and extended family unless they guaranteed the debt. In some cases, the spouse may be responsible for the debt if all bank accounts and property were held in common. However, the laws on this issue vary between states and you should consult a probate attorney for information specific to your state.
Co-Signers
Any co-signers are still liable for the debt if the estate could not pay it. The creditor's next action will be to begin collection action against the co-signer. The debt collector will be able to sue the co-signer if the debt is not paid.
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