Creditors Must be Paid from the Estate

Satisfying Creditors

Bills from credit cards, utility companies, and mortgage companies will continue to be sent until the creditors are informed of the debtor’s death.  Once creditors are informed of the death of a debtor, they must make a claim to the estate in order to be paid. Some creditors may not bother if the amount owed is small.

Creditors’ Claims may be Denied by the Estate

Once a claim by a creditor is made, the estate can either pay the claim or deny the claim.  If the creditor’s claim is denied, the creditors can go to court to demand payment.  The executor, or the personal representative, is responsible for making payments on behalf of the estate. Typically the estate must pay all creditors before distributing the estate assets to beneficiaries to make sure that debts are satisfied before distributing assets from the estate. It is important that the personal representative understands that certain debts and expenses have priority over the general creditors of the estate. For example, funeral expenses and taxes are to be satisfied before general creditors.

Creditors Demanding Personal Payments

Beware any creditor who pressures an executor, a personal representative, or even a family member to make payments on behalf of the decedent.  Unscrupulous creditors may try to pressure or guilt family members or personal representatives into paying debts on behalf of the decedent, but they have no legal right to do so and you have no legal obligation to personally satisfy debts of the estate.

Getting Legal Help

As an executor or personal representative, you don’t have to navigate the demands of creditors alone. Experienced Estate Administration Attorney Elga Goodman can help you understand your obligations and protect you from fraudulent creditor practices. Contact us today at 973-841-5111 to understand your duties to an estate.

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