Steps to Take to Protect Your Rights as a Creditor
Paying creditors is such an important duty of a New York City estate executor or administrator that paying creditors has higher priority than even paying those named in the will or other beneficiaries and heirs. Because of this, New York has even gone as far as to list types of debtors and the priority that those debtors must be paid. If you are owed money by an estate, you may be wondering what the steps are towards claiming there is a debt owed by an estate. The best thing to do to start is to get an experienced Westchester estate attorney working for you.
Whether you are owed for paying out funeral expenses, hold a mortgage against property owned by the decedent or have an unsecured debt owed by the decedent, there is a proper procedure that you must follow to be sure that you are properly paid that debt.
To begin with, you should keep in mind that there is a priority set forth as to which creditors get paid first. Because of this, taxes would have to be paid before credit card bills, for example. If the estate is insolvent and you fall under a low priority when it comes to payment of your debt, you may not be able to collect under some circumstances. Also, unless a debt is jointly held, third parties are not obligated to pay estate debts in case of an insolvent estate.
This does not mean that you should not file a claim, however. If you have a debt owed to you by the decedent, there is a seven-month time limit to file a claim against the estate after the Letters Testamentary are approved and the executor or administrator has been appointed by the Surrogate’s Court. In order to do this, you must file your claim in writing to the executor or administrator, or their attorney, that states the amount and type of debt you have. This claim must be filed in person or through certified mail.
If you file properly and within the seven months, your debt must be paid as long as the estate is solvent and you filed the proper documentation. In fact, the executor or administrator is duty bound to pay your debt before those that are lower in priority than yours or pay out any gifts to beneficiaries or heirs. Because of this, the executor or administrator could be held personally liable if they paid out to a third party wrongfully before your debt was paid.
If you are a creditor who is owed money by an estate, you should have an experienced estate attorney on your side to be sure that proper notice of debt is given in the correct timeframe and in order to protect your rights as a creditor. Call the Law Offices of Albert Gurevich at (914) 293-2043.