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. In this article, we will discuss the steps involved in the process and how to navigate them.
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.
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. In Texas, there is a specific order of priority for paying creditor’s claims, which is outlined in the Texas Estates Code.
The first priority is funeral expenses and expenses of last illness. These expenses must be paid before any other claims can be considered.
The second priority is the expenses of administration, such as court costs and attorney’s fees.
The third priority is secured claims, such as mortgages or car loans.
The fourth priority is 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.
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.
The executor or administrator must review the claim and determine if it is valid. 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 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.
Final Thoughts
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.
In conclusion, dealing with creditor’s claims in Texas probate court can be a complex process, but by understanding the rules, procedures, and order of priority, both creditors and executors can navigate the process with more ease. It is always a good idea to consult with a probate attorney to ensure that everything is done correctly and all parties’ rights are protected.
Do you need to hire an Experienced Probate Attorney to help?
If you are a creditor of an estate in Texas, you may be wondering if you need to hire an experienced probate attorney to help you with your claim. The answer is, it depends. If the estate is large and complex, or if there are multiple creditors, then it is probably a good idea to hire an attorney. However, if the estate is small and simple, or if there is only one creditor, then you may be able to handle the claim yourself.
The first step in filing a creditor’s claim in Texas is to send a notice of claim to the executor or administrator of the estate. This notice must be sent within 90 days of the date of death, or within 30 days of the date that the executor or administrator was appointed, whichever is later. The notice must include the name and address of the creditor, the amount of the debt, and a description of the debt. It is important to include as much information as possible in this notice so that there can be no question about what the debt is for.
Once the executor or administrator receives your notice of claim, they have 30 days to either pay the debt or object to it. If they object to your claim, they must state their reasons in writing and send you a copy of their objection. At this point, you will need to decide whether to pursue your claim through probate court or drop it altogether.
Call us today for a FREE attorney consultation at (210) 436-6601.
Related questions
How long do creditors have to file a claim against an estate in Texas?
In Texas, creditors have four months from the date of the first publication of the notice to file a claim against an estate. This time frame is established by the Texas Estates Code, and creditors must file their claims within this time frame or they will be barred from receiving any payment from the estate.
In what order are debts paid from an estate in Texas?
In Texas, there is a specific order of priority for paying creditors claims, which is outlined in the Texas Estates Code.
The first priority is funeral expenses and expenses of last illness. These expenses must be paid before any other claims can be considered.
The second priority is the expenses of administration, such as court costs and attorney’s fees.
The third priority is secured claims, such as mortgages or car loans.
The fourth priority is unsecured claims, such as credit card debt or medical bills.
It’s important to note that this order of priority applies only to the payment of creditor’s claims, not to the distribution of assets to beneficiaries of the estate.
Can a creditor open probate Texas?
In Texas, the probate process is typically initiated by a person who has an interest in the estate, such as a surviving spouse, child or other relative, or the executor or administrator appointed in a will. A creditor cannot open probate, but they can file a claim against the estate once the probate process has been opened.
If the estate is opened as an independent administration, the executor or administrator will have the authority to pay the creditors debts. However, if the estate is opened as dependent administration, the court will have to approve of any payment of creditors.
Additionally, if the estate is opened as a dependent administration, the court will also set a date to hear the case for any creditor that wants to file a claim against the estate, and the court will make the final decision on the validity of the claim, and the payment order.
How long can creditors go after an estate in Texas?
In Texas, the statute of limitations for creditors to file a claim against an estate is four months from the date of the first publication of the notice to creditors. This means that creditors have four months from the date of the notice to file a claim against the estate, otherwise 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.
Additionally, once the probate process is closed, the executor or administrator will have completed their duties and the estate’s assets are distributed to the beneficiaries, the creditors will not be able to file any claim against the estate anymore.
It is also important to note that the statute of limitations for creditors to file a claim against the estate may be different if the estate is opened under a different type of administration such as Small Estate Affidavit, Summary Administration or Muniment of Title, as they have different rules and time frames.
