It’s easy to put off aggressively collecting on a debt. As a business, you may not want a lawsuit or similar aggressive collection activity to damage your brand and reputation. As an individual owed a debt by another person, you may just expect them to make good on what they owe you eventually.
Unfortunately, some creditors find themselves in a situation where their opportunity to collect on a debt is all but gone. If the person who owes you money has died, you will want to take immediate steps to initiate collection efforts. Continuing to delay or put off recovering on your debt might mean losing out on your right to repayment.
Creditors can bring a claim against someone’s estate
Settling accounts and repaying debts are two of the important tasks an executor or personal representative of an estate must perform on behalf of the deceased. As a creditor, you may have sent notices and bills to the deceased party. Those written records of the debt will likely result in you receiving notification of the debtor dying. At that point, you have the right to seek repayment.
How do you collect from someone’s estate?
When the California probate courts approve and empower a personal representative with general executor authorities, they issue letters. The date that the courts appoint the executor will influence the rights of creditors.
Typically, creditors have up to four months from the date the courts issue letters to submit a claim about an outstanding debt. The creditor must file a claim with the courts first and then provide copies of their claim to the personal representative of the estate.
Alternatively, the creditor can have up to 60 days to file a claim after receiving notice of the probate proceedings from the personal representative of the estate. The deadline for making a claim expires after the latter of the two time periods passes.
Collection activity on its own quickly gets complicated. When you have to collect from someone’s estate, things can be even more difficult. Having good support in this process will ensure you know your rights and don’t fail to take the necessary steps to make a claim against someone’s estate when they owe you money.