Which Creditors Can Make A Claim Against The Estate After Someone Dies?
Creditors can be categorized as unsecured creditors and secured creditors. They can also be categorized as debts that are contingent upon something and debts that are not contingent upon anything. In addition, they can be separated by debts that have been established and debts that have not really been established. After someone dies, a personal representative or executor is appointed. That personal representative must give notice to all known creditors. Once that’s done through a certified mailing, a notice to unknown creditors must be published in the newspaper.
Creditors have the later of three months after the date of first publication or 30 days after the date that they actually received notice to file a claim. If that timeline has passed, the creditor cannot assert its claim against the estate of the deceased person and their claim will be forever barred. Once the proper notice is given to the creditor, the creditor needs to decide about filing its claim. Secured creditors are going to have an advantage over unsecured creditors. Secured creditors have an agreement with the deceased persons that if their debt is not paid, then the creditor can seize the collateral. For example, if the mortgage is not paid, the creditor can foreclose and take the house.
If a claim is properly and timely filed, then the personal representative can object to the claim and they don’t really need to state the grounds for that objection. The creditor must then file a lawsuit against the estate in order to collect. For claims that are not established or liquidated, the estate may claim defenses for not having to pay on that contract or claim, which is subject to the underlying lawsuit. If the creditor does not file a lawsuit after the estate objects to the claim, then the creditor forever loses its ability to collect against the estate. If the creditor hasn’t done anything in two years, it can’t collect.
How Can A Bankruptcy Impact An Inheritance?
If someone who previously filed a bankruptcy has passed away and there are no assets, then the bankruptcy may not matter in the estate proceeding. If there are assets, the bankruptcy could matter, depending on bankruptcy agreements or judgments. It would be incumbent upon the personal representative to connect the deceased person’s bankruptcy attorney with the probate attorney. If you are a beneficiary of an estate or someone who has filed bankruptcy in the past, the receipt of an inheritance could be impacting your ability to file a bankruptcy or a judgment of fact. Your interest in an estate is an interest.
If you, for example, are looking to file bankruptcy and your mother passed away with you named on an account as a beneficiary or named under her will, the bankruptcy court could require you to utilize those inherited assets to pay off your creditors as part of the bankruptcy plan. If you are looking to file bankruptcy and your parent is sick or elderly, it may behoove you to impress upon your parent to leave you money in a third-party spendthrift discretionary trust, so that those assets are not a part of your bankruptcy estate.
For more information on Creditor Claims Against An Estate In Florida, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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