When a person passes away, their assets and debts must be settled through the probate process. This process can be complicated, especially when it comes to the payment of creditors.
In Texas, there are specific rules and procedures that must be followed when dealing with creditor’s claims in probate court.
Understanding the Probate Process
Probate is the legal process of settling a deceased person’s estate. This includes identifying and inventorying the assets, paying debts, and distributing the remaining assets to the beneficiaries. The probate process is typically handled by an executor or administrator, who is appointed by the court to handle the deceased person’s affairs.
In Texas, there are two types of probate: independent administration and dependent administration. Independent administration allows the executor or administrator to handle the probate process with minimal court supervision, while dependent administration requires the court to approve all major decisions, including payments to creditors.
Creditor’s Claims in Probate
Creditor’s claims are the debts that a deceased person owes at the time of their death. These claims must be paid out of the deceased person’s assets before the remaining assets can be distributed to the beneficiaries. According to the Texas Estates Code, there is a specific order of priority for paying creditor’s claims:
- Funeral expenses and expenses of last illness. These expenses must be paid before any other claims can be considered.
- Expenses of administration, such as court costs and attorney’s fees.
- Secured claims, such as mortgages or car loans.
- Unsecured claims, such as credit card debt or medical bills.
Notice to Creditors
One of the first steps in the probate process is to give notice to creditors of the deceased person’s estate. This notice must be published in a newspaper of general circulation in the county where the deceased person lived. The notice must also be sent to any known creditors, such as credit card companies or banks.
The notice informs creditors that they have a certain amount of time to file a claim against the estate. In Texas, creditors have four months from the date of the first publication of the notice to file a claim. If a creditor fails to file a claim within this time frame, they will be barred from receiving any payment from the estate.
It’s important to note that this four-month time frame may be extended by court order for good cause shown, but it will not be extended for longer than two years from the date of the first publication of notice.
Filing a Claim
If a creditor wishes to file a claim against the estate, they must do so in writing and provide documentation of the debt. The claim must be filed with the probate court and a copy must be sent to the executor or administrator of the estate.
Once the executor or administrator receives a notice of claim from the creditor, they have 30 days to review, determine if it is valid or not, and either pay the debt or object it. If the claim is valid, it will be allowed and the creditor will be paid according to the order of priority outlined in the Texas Estates Code. If they object to the claim, they must state their reasons in writing and send the creditor a copy of their objection. At this point, the creditor will need to decide whether to pursue the claim through probate court or drop it altogether. Lastly, if the claim is invalid, it will be disallowed and the creditor will not be paid.
Challenging a Disallowed Claim
If a creditor’s claim is disallowed, they have the right to challenge the decision in court. The creditor must file a written complaint with the probate court and provide evidence of the debt. The court will then hear the case and make a final determination.
The Takeaway
Dealing with creditor’s claims in probate court can be a complex process, but it is important to understand the rules and procedures to ensure that the claims are handled correctly. By giving notice to creditors, filing valid claims, and challenging disallowed claims, creditors can ensure that they receive the payment they are entitled to from the deceased person’s estate.
It is also important for the executor or administrator of the estate to understand their responsibilities in reviewing and handling creditor’s claims, to ensure that the process is carried out correctly and efficiently.
Do you need help with a probate matter in San Antonio or the surrounding area? We are San Antonio probate attorneys. We help clients navigate the probate process. Call today for a free confidential consultation, (210) 239-8518.
Our San Antonio Probate Attorneys provide a full range of probate services to our clients, including helping with creditor’s claims. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the probate process. We have years of combined experience we can use to support and guide you with probate and estate matters. Call us today for a FREE attorney consultation.
Disclaimer
The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.
