A Better Legal Experience From Start To Finish

  1. Home
  2.  » 
  3. Estate Planning
  4.  » How do you find out when a borrower or debtor dies?

How do you find out when a borrower or debtor dies?

On Behalf of | Jun 2, 2022 | Estate Planning |

Whether you loan someone money or have a judgment against them from a civil lawsuit, you have a reasonable right to expect them to fulfill their financial obligations to you. They should continue making payments to you according to your loan agreement or the terms of the judgment.

Obviously, you won’t receive payments anymore when the person who owes you money dies. Thankfully, the law does not simply eliminate someone’s financial obligations at the time of their death. The financial responsibility of the deceased will pass to their estate.

Creditors absolutely have the right to make a claim against an estate in California probate court. How do you discover when someone who should be repaying you dies?

You may receive direct notice

There are time limitations to estate claims made by creditors. If you don’t notify the courts of the debt and your intent to collect on it in a timely manner, that oversight could prevent you from getting the repayment that you deserve.

State probate law requires that the representative of the estate notify creditors in writing about the death and the upcoming estate administration. In some cases, the executor may reach out to your business to arrange for repayment directly if they have assets in hand and recognize the validity of the debt. Other times, they will expect you to go through the probate courts to make a claim.

You may have to look for notice

While the personal representative of the estate should try to locate and notify all known, specific creditors, they may not yet have had time to review all of the deceased’s financial records and correspondence.

In some cases, notice by publication may be what occurs, rather than direct formal notification. The representative will need to publish notice of the estate in at least three different papers. If you are an unknown creditor and the representative is not aware of your claim, they will not be able to contact you. Frequently reviewing local publications can help you locate notice of probate proceedings so that you can file a claim.

Knowing the rules that govern California estate claims will help companies more effectively collect on debts left behind when someone dies.