Handling a Decedent Debts

Most Americans are in debt to some extent, and unfortunately, our liabilities do not die with us. Very often, a loved one will pass away owing money to creditors, and the family is left with many questions as what must happen with those liabilities. If you are charged with administering a deceased loved-one’s estate (you have been named the “executor” or “administrator” of the estate), for instance, you should be aware that there are certain procedures you must follow with regard to the debts of the decedent. We invite you to call the experienced Houston Probate attorneys at Garg & Associates for thorough guidance in navigating the proper handling of a decedent’s liabilities.

The probate attorneys at Garg & Associates will advise you as to the strict notice requirements that will be necessary to make the decedent’s creditors aware of the death. You should be aware of the stringent requirements which creditors must follow to present a claim against the estate. As executor, you will be responsible for approving or denying any claims that come in from the decedent’s creditors. You must be diligent and timely in this regard, as the law requires that all claims be either accepted or rejected within 30 days of receipt. If a creditor’s claim is rejected, the creditor will have 90 days to file suit on the rejected claim.

The court must either approve or disapprove and classify a claim accepted by the representative that has been on file for ten days. If the court is satisfied that the claim is valid, it will be approved and classified. Creditor claims are divided into eight classes, and the court is charged with the duty to classify all claims which have been approved in the following order:

  • Class 1. Funeral and last illness expenses not to exceed $15,000. Any excess is classified as an unsecured claim.
  • Class 2. Administration expenses.
  • Class 3. Claims secured by a mortgage or other lien against specific property, including tax liens;
  • Class 4. Claims for delinquent child support and accrued interest.
  • Class 5. Claims for taxes, penalties and interest due the State of Texas.
  • Class 6. Claims for Texas Department of Corrections confinement.
  • Class 7. Claims for state medical assistance payments.
  • Class 8. All other claims.

The procedures for handling creditor claims are very specific and include detailed timelines. If you are faced with administering a decedent’s estate, it is important that you contact the experienced probate attorneys at Garg & Associates to guide you and ensure that the process is handled correctly and effectively.

We invite you to contact us for a consultation. Call Garg & Associates, PC at 281-362-2865 or complete our contact form.

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Garg & Associates, PC | 21 Waterway Avenue, Suite 300 | The Woodlands, Texas 77380 Please call 281-362-2865 | Fax: 866-743-4506
Serving The Woodlands, Spring, Houston, Conroe, Kingwood, Tomball, Cypress, Huntsville, Cleveland, Stafford, Montgomery County, Harris County, West Oaks, Memorial, Sugar
Land, River Oaks, Alief, Stafford, Missouri City, and Southwest Houston Texas.