Your debt does not die with you. This is a common misconception. However, understanding the laws of creditor’s claim may assist you in planning how to deal with your debt after death.
If a probate of your estate is opened within 2 years of your death, your personal representative or the court will publish a notice to creditors so that they may file claims against your estate. Any creditor that properly files a claim with the court will be paid out of the assets in your probate estate.
The court will rank each of the creditor’s claims according to a statute, which determines which claims have priority. Then, the claims will be paid out of the probate estate before anything is distributed to the deceased person’s beneficiaries.
However, assets passing outside of the probate estate will not be subject to these creditor’s claims. For example, if your checking account is jointly titled with your spouse, he or she will have access to that account immediately and creditors will not be able to reach those funds.
Also, if your house is registered as your homestead, your homestead is protected from the claims of creditors so long as it passes to those allowed under statute (usually your spouse and your children).
If your estate is not probated until more than 2 years after your death, claims against your estate are barred against the statute of limitations, meaning that those claims cannot be enforced by law. If you have few assets and many debts, your heirs may choose to wait for two years before filing probate.
For more information on Creditor Claims In Florida, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (727) 827-7777 today.