Collecting A Debt From A Colorado Probate Estate
Collecting a Debt from a Deceased: What Happens to A Person’s Debt When He Dies?
The death of a friend or working acquaintance is always a traumatic experience. However, if you are owed money, along with the sympathy card, send a written request for payment of any debts. Address that request to the personal representative of the probate estate. While this may seem harsh, the results if you procrastinate are just as harsh.
When a person dies, the process of winding up the deceased’s affairs is accelerated. In Colorado, a probate estate is opened and a person is put in charge of gathering assets, paying bills and distributing the remainder to the heirs. The formal name of the person in charge is the personal representative. Other states call this person an executor or administrator. In Colorado, however, the term used is personal representative.
Pay Attention to Notices
One of the first things a personal representative will do is publish a Notice to Creditors. The notice is published in the back of a local paper. The notice states that the person in question has died and all creditors have about 4 months to present their bills (claims) to the personal representative. If the claim is not properly presented within 4 months, the creditor will not get paid.
Now, personal representatives tend to take advantage of this little rule to wipe out large and small debts alike. Four months goes by very quickly. So, the personal representative publishes notice in the back of some obscure local paper, sits quietly while 4 months ticks off, and then tells the credit card companies, ma bell and the doctors, “Sorry! Too late! Not gonna get paid!”
Well, there is another rule. If the personal representative knows about the creditor or with just a little digging could have found out about the creditor, published notice does not extinguish the debt. A known creditor has one year from the date of death to properly present its claim to the personal representative, unless the creditor has actual notice that the 4-month time period is ticking away.
The Written Claim: A Very Harsh Rule
This next part is very important. A creditor must make a written claim for payment either addressed to the personal representative or by filed in the probate court proceeding. The request must be addressed to the personal representative in the capacity of personal representative (i.e., Attention: Douglas Turner, Personal Representative of the Estate of John Doe). The claim must state that payment is being sought from the estate. And in our office, a copy of the claim is filed with the court as well as mailed to the personal representative.
This requirement for a written claim is a very harsh rule. If the personal representative has claims against the estate, even the personal representative must make a written claim. Otherwise, not only is there no right to payment, it is a breach of the personal representative’s duties to the heirs and other creditors if payment is made. There are very few exceptions to this very harsh rule. So, express your sympathies and then send your written request for payment to the personal representative. Otherwise, you may be out of luck.
