How are creditors against an estate handled?

Creditors take priority before the estate’s assets and property are distributed to beneficiaries or heirs. Part of the probate process requires notifying creditors of the death. Depending on the state, this may involve a notice in the local newspaper or letters to each creditor.

After the notification, creditors have a limited amount of time to file claims against the estate. This can be done by notifying the personal representative, notifying the probate court, or sending a bill, depending on the state. Claims approved by the personal representative or executor are paid from the estate. The personal representative can reject claims he or she believes are invalid in which case the creditor must sue.

If the estate does not have enough money to pay legitimate debts, property may be sold to satisfy debts. Afterward, the personal representative or executor will determine who is repaid and in what order creditors are paid based on state law.