Creditors at the Gates: How Claims Threaten ProbateCategory: News
No one likes dealing with creditors, but when your loved one passes away, one of the responsibilities of the personal representative of the estate is to handle the decedent’s debts.
If you are in a situation where you have to deal with these creditors, please contact the Collier County probate lawyers at Friedin & Inglis, P.A. today.
For some people, an unexpected claim immediately seems like a reason to object, but this doesn’t necessarily make the issue go away. The claim may, in fact, be valid but that doesn’t mean you have to rush to pay it. Some people dislike creditors threatening the ability to close the estate and wish to simply hand over money and be done. However, this is not necessary in all cases.
Make sure you work with your attorney closely when these claims arise. An experienced probate lawyer can help you figure out which claims are valid or invalid, as well as which ones are negotiable and how to best handle them.
Objections to Claims
If you choose to object to a claim, you have a certain timeframe in which to do so — usually within four months of your publication of notice or within 30 days from the timely filing or amendment of the claim, whichever occurs later. If you have extenuating circumstances, you may be able to get extensions on these timelines.
Your objection must be filed in accordance with Florida probate rules. If you fail to file your objection in a compliant manner that satisfies deadlines and other rules, you lose the opportunity to object.
Your probate lawyer is crucial to this process to make sure you fulfill your responsibilities and don’t lose your chance to object.
If you file a timely objection, the creditor has another 30 days to respond to your objection. This may result in negotiations to reduce the amount of the claim or a declaratory action that asserts the validity of the claim. The claimant’s response to your objection determines what happens in probate. Your lawyer may be able to come to an efficient resolution using fine-tuned negotiation skills or it may be in your interest to move into litigation.
A compelling reason for many to resolve claims as efficiently as possible is to avoid interest. If the original agreement between the decedent and the claimant allowed for interest, that interest still accrues. Even on other claims that don’t expressly provide for interest, if the claims are found to be valid, the estate or the personal representative may still be liable for interest.
The court may require that the estate set aside a certain amount of money for payment of claims. These assets may be ordered to be reserved as cash, property holdings to be turned over or later liquidated, trust assets or any other form of security or collateral that the creditor may request or that the court deems fair.
Even if the estate is insolvent, the court may order a percentage be reserved.
Talk to an experienced probate lawyer at Friedin & Inglis, P.A. to help ensure creditors don’t unfairly or unnecessarily threaten the value of your loved one’s estate.