- Posted on: Feb 11 2019
When a loved one dies, they will likely leave debt of some sort. If the death was unexpected, the debt can be a tremendous burden on the estate. A probate attorney can help resolve debt in a way that favors the heirs.
Like a bankruptcy, probate has deadlines that dictate how and when a creditor’s claim must be filed. Each debt must be treated separately. Deadlines will extinguish some of these debts, but not all. A probate attorney can help you determine which debt might be extinguished using probate deadlines. The first defense against creditor claims is providing notice and seeing which creditors respond in a timely fashion. Many simply fail to meet the basic deadline.
Creditors who do meet the deadline frequently fail to provide basic documentation supporting the claim. As such, a demand for documentation, including a deadline for response, starts the clock and opens the door to the rejection of the claim for cause. Many creditors do not follow-up on either the documentation or the rejection of a claim for cause.
If the creditor does provide documentation and verify the debt, a probate attorney can work to negotiate the debt down. Once a valid claim has been submitted, the administrator can accept the claim, or the attorney can force the acceptance of partial payment based upon the size of the estate. Most creditors do not want to wait until after all priority claims have been resolved in order to collect the money owed to them, and are typically willing to negotiate with a probate attorney and give deep discounts in order to receive immediate payment.
It is possible to achieve discounts in creditor claims when a probate attorney is hired to represent the estate and negotiate the debt. Creditor claim reductions can save an estate a substantial amount of money, which ultimately results in a higher amount available for distribution to the heirs.
Posted in: Estate Planning