The debts you owe during your lifetime are not automatically extinguished when you die. If a creditor is owed money by a deceased person, they can file what is referred to as a creditor claim in order to seek recovery of the debt owed. Some common types of creditor claims include the following: medical debt, credit card debt, enforcement of oral and written contracts, such as claims for caretaker services, and various spousal obligations pursuant to marital settlements, such as alimony, child support, or life insurance.
Notification to Creditors
Florida law provides a notification process to creditors during an estate administration. Those creditors which are known, or reasonably ascertainable, are required to be notified by the estate personal representative through a direct mailing. Other unknown potential creditors are provided notice by publication in the local newspaper in the county where the estate administration is pending.
Creditor's Option to Open Probate
In the event that there is debt owed by deceased person but an estate has not been opened by the deceased person's nominated executor or other heir, a creditor may elect to open an estate so that they may timely assert a claim and pursue collection of their debt.
Procedure and Deadlines for Filing Claims
There are various deadlines that are part of the creditor notification process. After a creditor receives notice of a probate proceeding for a deceased debtor, the creditor has thirty (30) days from the day the mailed notice was received, or, if no direct mailing notice was sent to the creditor, on or before the later of the date that is three (3) months after the first publication in the newspaper runs to submit a claim to the court. In order to properly submit a claim, a creditor is required to file a formal written claim with the court. Sending a copy of a bill to the personal representative of the Estate or a letter to clerk will not suffice. Once a proper claim is submitted to the court, a personal representative may choose to pay the claim or may file objection to the claim. A beneficiary may also file an objection to a creditor claim. Any objection must be filed in proper form on or before the expiration of four (4) months from the first publication of notice to creditors or within thirty (30) days from the timely filing or amendment of the claim, whichever occurs later. Merely advising a creditor by letter that there is an objection is not sufficient. If there is an objection to a creditor's claim, the creditor will have thirty (30) days to file a separate civil litigation action to pursue recovery of the monies they allege are owed. If the creditor fails to file the separate lawsuit in a timely manner, their claim will be barred.
Late Filed Claims
When a creditor files a late claim, the personal representative may ask the court to strike the claim as untimely. All unfiled or untimely filed creditor claims are barred after two (2) years from the decedent's date of death. So, for instance, if an estate for a decedent is not opened until two years after death, no creditor will have the right to assert a claim against the Estate. On the other hand, if a creditor is timely notified while an estate is pending but fails to timely file a claim they will also be prevented from seeking payment of their alleged claim. The only exception to this two year statute of limitation is if there was a known, or a reasonable ascertainable creditor, who did not receive proper notification through the mail.
In order to ensure your rights are protected through the creditor claim process, it is important to have an experienced attorney who is familiar with the types of claims that may arise and the procedural deadlines. Ms. Rountree has litigated and negotiated settlements for creditor claim disputes, including spousal claims for enforcement of support and caretaker claims for services rendered to a decedent. Shannon L. Rountree, P.A. offers services to represent personal representatives, beneficiaries, and creditors throughout the creditor claim process, including litigation of claims.