When your loved one dies, all you want to do is grieve and take care of your family. You don’t want to think about paying bills and calling insurance adjusters. You just want to think about the time you had with your loved one and all the good memories you made together. Unfortunately, someone has to act as the executor of your loved one’s estate. If that person is you, there are some things you need to know.
Some people think all the executor has to do is divide up the decedent’s assets and pass them out to the people named in the will. If there isn’t a will, then they’ll divide them between the loved one’s children. It sounds simple. In reality, however, being the executor of someone’s estate entails a lot more than that. You need to deal with the courts and the creditors of the estate. You need to make sure all the bills are paid and only then can you think about dividing up your loved one’s assets. In fact, their heirs get nothing until all the estate creditors are paid. So, it’s important that you understand which creditors have to be paid and how you can negotiate a fair settlement of any of your loved one’s outstanding debts.
This is something an experienced Houston, Texas probate lawyer can help you with. At the end of the day, your loved one would’ve wanted their assets to go to the people they loved – not banks and other creditors. So, you owe it to their loved ones to save as much money as possible.
There are Two Kinds of Creditors – Secured and Unsecured
Before we talk about which creditors are willing to settle for less than the full balance, you need to know what types of creditors there are. The two main types are secured and unsecured. A secured creditor is someone who holds collateral to your property. For example, a mortgage company’s loan is tied to your house. If the loan isn’t paid, the bank is allowed to take your house. The same is true for a car loan. If you don’t pay your car loan, they can repossess your vehicle.
The other type of creditor is an unsecured creditor. These are your basic credit cards, utility bills and personal loans. If they aren’t paid, there is no collateral to take. The bank would have to decide to file suit or write the debt off. They usually send it to collections for a year or two before they make this decision. If your loved one’s debts end up in collections, they can be relentless. They may make you feel like the debts have to be paid in full but that’s not always the case.
Why Would Estate Creditors Be Willing to Settle for Less?
When someone dies, the banks are notified rather quickly. As the executor, you’re legally required to let the creditors know that your loved one has died. But, even if you don’t, most banks run monthly sweeps to identify any account holders that have died. Once they learn your loved one has passed on, they’ll start calling asking for payment. They’ll tell you the entire debt must be paid in full. They aren’t going to offer a reduced settlement unless you ask.
When you talk to the estate creditors, let them know there really aren’t enough assets to pay everyone in full. Let them know you’re prepared to offer them about 30% of what is owed. Odds are, they’ll make a counter offer. This is when it comes in handy to have an experienced probate lawyer by your side. You can call our office today and schedule a meeting with an experienced probate attorney in Houston.
Contact an Experienced Lawyer in Houston to Deal with the Estate Creditors
When your loved one passes away, you do have a little bit of time before you have to deal with the estate. You have to bury them and try to settle things down with your family. The last thing you want to deal with is paying their bills and going through their things. However, if you’ve been named the executor of their estate, you don’t have much choice. At some point, you’ll have to deal with their final affairs. When this time comes, you’ll want to call our office. We can help you negotiate a settlement with the estate creditors. They have the knowledge and experience to help you do this.