Grounds to Challenge Creditor Claims Against an Estate in Probate

When someone passes away, their creditors have a right to make claims on the estate, and, depending on their priority, get paid from the proceeds of the estate before any beneficiaries see any of the assets of the estate.

But just because a creditor validly and timely makes a claim on the proceeds of the estate, doesn’t make that creditor’s claim valid. There are a number of ways that the personal representative can challenge the validity of a claim made by a creditor.

The Claim is Time Barred – There is a maximum amount of time, called a Statute of Limitations, that a creditor has, to maintain the legal right to sue to collect on its debt. Often, creditors with debts that have lain dormant for many years, suddenly wake up and make claims when they get the notice of administration of the estate.

But in many cases, these creditors’ claims are outside of the statute of limitations, and can no longer be validly enforced.

Lack of Documentation – Many debts are bought and sold and assigned and transferred, and through it all, the current “owner” of the debt, may not have the correct documentation of the debt.

The creditor may not have the original loan documents, or documents verifying the alleged indebtedness, or an original signature on an application or contract evidencing the debt.

Just like someone alive would have the right to do, the estate’s personal representative has the right to say that the creditor has insufficient paperwork to document the deceased’s debts, or to document ownership or transfer of the debt to the creditor making the claim.

Can’t be Enforced Against the Estate – Not every debt that the deceased owes, can legally be enforced against, and paid by, the estate. Creditors often don’t know this, and will try to get the estate to pay every debt the deceased owes, even if it’s one that the estate has no legal obligation to pay.

Wrong ID – Identity theft is real, and it’s a thing. Just like creditors will often collect on you for debts that you never incurred in life, they will also do so in death.

It isn’t unusual for a creditor to, for example, try to enforce a debt belonging to one debtor with a very similar name, upon another debtor who has nothing to do with that debt. Debtors often confuse people with similar sounding names, or who have similar names but different suffixes like “Jr.” against the wrong people.

Remember as well that spouses are different people for the purposes of owing debts. A creditor cannot enforce a debt that, for example, a wife incurred, against the now-deceased husband’s estate, just because they were married.

Fraud – Debts incurred because of fraud, misrepresentation or wrongdoing, may not be able to be enforced. Many people who may have been ill or suffering cognitive decline later in life, may have incurred debts that they were deceived into incurring. This is a valid basis to challenge a creditors claim.

We can help you fight creditors if you don’t think they have a valid claim in your probate case. Call the West Palm Beach probate attorneys at The Law Offices of Larry E. Bray today.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0733/Sections/0733.705.html