What Happens To Debts That Other People Owe You

As stressful as it is when you owe debts that you cannot pay, it is just as stressful when other people do not pay you the money that they owe you.  This is true in the case of debts you incurred and money you lent on your own behalf, and it is also true when you are the personal representative of the estate of a recently deceased person and you are trying to collect or pay debt on behalf of the estate.  Being the personal representative of the estate of someone who did not have their finances in order when they died is always a challenge, and debts owed from the estate and debts owed to the estate can feel like the Scylla and Charybdis of probate.  Meanwhile, the beneficiaries of the decedent’s will keep reminding you that they want their inheritance and they want it now.  An Orlando probate lawyer can help you collect debts owed to the estate you are representing so that the estate can settle and the heirs can receive their inheritance.

When Is It Worthwhile to Seek Repayment of Debts Owed to an Estate?

Once the estate of a deceased person settles, it is too late for creditors to seek repayment of debts that the deceased person left outstanding.  Therefore, the personal representative must notify known creditors that the estate is open for probate and publish notices informing unknown creditors of this fact.  When the creditors file their claims with the estate, the personal representative must resolve them before the estate can settle.  Sometimes the personal representative settles the claims for less than their original amount.  Paying the debts sometimes requires the personal representative to sell property belonging to the estate.  In the worst cases, the estate becomes insolvent, and the beneficiaries inherit nothing.

If other people owed outstanding debts to the decedent, probate is also the time for the personal representative to seek repayment of these debts.  If you are lucky, then all you have to do is ask, and the debtors will pay what they owe or negotiate with you for a settlement amount.  In some cases, you might need to sue the debtor for payment of the debt.  Chasing down debtors is time-consuming, and you and the beneficiaries must decide whether the matter is worth pursuing, given how much it delays the settlement of the estate.  It is definitely worth waiting for the lawsuit to resolve before you settle the estate if the plaintiff died a preventable death, such as in an accident or as a result of a medical error, then the beneficiaries will not mind waiting, because the damages award will form a large portion of the inheritance.

Contact Gierach and Gierach About Collecting Debts in Probate

A probate lawyer can help you pursue the repayment of debts owed to the estate for which you are acting as a personal representative.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.

Source:

consumerfinance.gov/ask-cfpb/does-a-persons-debt-go-away-when-they-die-en-1463/