One of the first thing a PR must do when opening an estate is putting the known creditors on notice in writing that they may be owed a debt, and if so that there is a set time frame to file an appropriate ‘Claim” against the estate.
The executor is also required to publish a notice of death in a local legal newspaper which serves as notice to any unknown creditors and starts the time running, they have in which to file a claim. Creditors that miss the deadline to file a valid claim are barred from being paid by an estate.
A claim is not considered filed until it is received at the Register of Wills.
Your heirs can either continue to pay the debt or sell the property to pay off the debt. If you believe this would cause a burden for your heirs, you can leave them assets in your will specifically designated to pay off the debt.
You heirs will not have to pay unsecured debt, but the executor of your estate will have to pay the debt using estate assets so long as a claim is filed in a timely manner.
As many who have dealt with them in the past can attest, debt collectors often walk a very fine line between what is legal and what is not when pursuing a debt.
There are several governmental bodies that have placed restrictions on certain debt collection practices, especially concerning a deceased person.
Under the Fair Debt Collection Practices Act (FDCPA) collectors can only discuss the decedent’s debt with that person’s partner, guardian, executor, or parent(s) if the deceased was a minor. They may also contact persons authorized to pay debts with assets from the decedent’s estate.
Outside of these parties collectors are usually only authorized to contact third parties a single time to get contact information of those listed above.
Mr. Abraham is an experienced attorney and founding member of the Law Firm of Abraham & Bauer. The Towson, MD office of the firm concentrates its practice in Estate Planning, Elder Law, Probate, Medical Assistance (Medicaid), Guardianship, Asset Preservation and Fiduciary Representation.
He is an active member in a number of professional organizations that focus on law, the senior community, and estate planning. He works with clients in Central Maryland, especially in Towson, Hunt Valley, Lutherville/Timonium, Parkville, White Marsh, Bel Air & Northern Baltimore City.
Schedule a consultation to help you and your loved ones.