People often engage in transactions that result in money being owed to them. For example, the deceased may owe money to a friend or business partner or rent as a tenant. But what happens if someone dies before they receive the money owed to them? Can someone else collect these debts? If your loved one has died, someone may owe them money. In this blog post, we discuss debt collection for the deceased.
Does Debt Die with the Person Who Owes It? Debt Collection After Death
When someone dies, the outstanding debt fails to disappear. In fact, debt survives the death of the creditor. At that point, the amount owed transfers to the creditor’s estate. In fact, a debt owed to the estate is considered an estate asset. The estate is entitled to collect the debt as part of the probate process.
Debt Collection: Who Can Collect a Deceased Person’s Debt?
Before anyone can act on behalf of a deceased person’s estate, they must be appointed by the probate court. If the deceased person had a will, they probably named someone they trusted to act as their executor (also known as a personal representative).
How Can an Executor or Trustee Discover If Someone Owed the Deceased Person Money?
If the executor or trustee is the deceased person’s spouse, they may be very familiar with the assets owned by their deceased spouse, including how much money their spouse was owed and who owed it, but a non-spouse executor or trustee may be less knowledgeable about the assets owned by the deceased person.
What Happens After You Discover the Debt? Debt Collection in Action
The executor or trustee who discovers that a debt was owed to the deceased person should first ascertain if there are any amounts outstanding, that is, amounts that were due at the date of death.
Once the executor or trustee is aware of a debt that is owed to the deceased person’s estate, they should provide a formal written notice to the debtor that the deceased person has passed away and the date of death, that the estate is their new creditor, and that future payments should be made to the estate via the executor or trustee.
What If the Debtor Will Not Pay?
Although an executor or trustee will initially attempt to collect a debt by contacting the debtor and requesting payment of the amount due, if those collection efforts are not successful, they may need to seek the help of a lawyer to send a demand letter to the debtor or file a lawsuit on behalf of the estate to collect the amount owed.
About Skvarna Law Firm in Glendora and Upland, California
Let a skilled attorney assist with your estate plan. So, contact us today to learn about your options (909) 608-7671. We operate offices in Glendora and Upland, California. Therefore, we provide legal services for individuals living in San Bernardino, Los Angeles, Orange, and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
