• how to deal with creditors and debts in california probate

How to Deal With Creditors and Debts in California Probate

California has specific laws and rules about the process required to deal with creditors and debts in California probate. It is the estate’s executor or appointed representative’s responsibility to notify all creditors of the probate proceedings. This notification allows creditors to make and file formal claims against the probate estate. It is important to note that creditors and interested parties usually have a limited amount of time to file a claim.

What our Clients Say...
I used A People’s Choice for the preparation and filing of court documents in connection with probate for my sister’s estate.  I began the probate process in pro per without knowing of the services of A People’s Choice.  After many trips to the LA Court house and attempting to interpret the requirements for each filing, I heard of A People’s Choice.  Fantastic find!  I hired this firm after discovering the difficultly in processing the probate by myself.  Very knowledgeable with good technology to keep me informed along the process of their filing of numerous documents.  Their fees were significantly less than what I would have had to pay for an attorney yet their services were excellent and I could not see where an attorney would have been any better (or as good).I highly recommend this service.
Ron C.
“I can’t say enough about the level of service and professionalism I received working with A People’s Choice. Emails were always responded to quickly and thoughtfully. They really care about the process and helping you get the best result with no up-selling. Of course, they can’t provide legal advice, but I was referred to an attorney when I needed some questions answered who was very reasonable and easy to get a hold of as well. The process played out according to plan and I ended up saving a lot of money by going with A People’s Choice over an attorney.”
M. Rice
“I am writing to give A People’s Choice my utmost recommendation. I live in New England and found them on the web. After speaking with a staff member on the phone I had the confidence to give them my business. A People’s Choice handled my probate case with great professionalism and knowledge. My case turned out to be more complicated than originally believed and the staff walked me through each step. They always responded promptly to my email questions. In the end, their service was exactly what I hoped for; they saved me thousands of dollars and allowed me to do it from across the country. They were truly a pleasure to work with.”
K. Levenson
“A People Choice provided excellent support with the appropriate legal documents and filing process in a spousal property petition after my husband passed. Lawyers wanted to charge me a fortune. However, once I spoke with someone at A People’s Choice, they took on my case and guided me through every step. A People’s Choice has years of experience which gave me a sense of trust and confidence. I always got immediate feedback from every email request. If you have a need for probate help, I would highly recommend A People’s Choice.”
Sylvia A
“I had a great experience with my probate using A People’s Choice! The people that assisted me were so helpful.  I could not have done this probate by myself.  I was able to save over 10,000 in lawyer fees!  All my emails were always returned so quickly, and I am a very satisfied customer.  I would highly recommend A People’s Choice to all my friends and family!”
Joi C
“APC did a great job with my father’s probate case. I highly recommend them. Professional staff!!! Probably saved me about $10k.”
Eric N
“When my mother in-law passed away last year, we didn’t know what to do. We contacted A People’s Choice and from day one they were very helpful. They almost held our hand every step of the way, and if I had a question any time of the day or night someone got back to me within a few hours. I highly recommend A People’s Choice if you don’t know what to do and don’t want to pay the high price of a lawyer especially if you don’t have much money.”
Mikki C
“A People’s Choice helped us throughout our entire year-long probate making the process very easy and manageable while at the same time saving us thousands of dollars in lawyer’s fees. Not only were they extremely friendly and fast to respond to our questions but they made the process simple enough that we hardly ever had to contact the courthouse directly and we even had a hearing done without an appearance. Would highly recommend A People’s Choice to anyone!”
A. Vuckovich
“A People’s Choice is a very responsible and effective company, staff there is very nice and replied to all my questions by email quickly. With their help, I accomplished the probate in 8 months successfully and saved at least $10,000.00 in attorney fees, so I strongly recommend everybody to contract with A People’s Choice and let them to help you with your legal documents. You will be very satisfied with their work as I did!!!!”
C. Chiu
“A People’s Choice walked me through the entire probate process. They are so professional and helpful. Thank you to the staff for your guidance and patience to talk me through such difficult time. You made the process very smooth for me. I am so glad that I found you.” 
Sandie K.
“The staff at A People’s Choice made a scary Probate pretty much stress free. I would send an email with a question I had thought of over the weekend with the expectation that I would get an answer on Monday. Lo and behold, I often got an answer within minutes! We are very pleased and will be referring our friends/family to A People’s Choice!”
L. Garrett
“Thanks to A People’s Choice I was able to get through a probate matter very smoothly. I had not one issue with the Courts. They guided me through the whole probate until the very end. I live up north but that didn’t matter, A People’s Choice did an excellent job keeping me informed with everything that I needed to do. I saved THOUSANDS of dollars by going with A People’s Choice. You can’t go wrong, no matter what your needs are. I saved a lot of money by not having to pay out a percentage to any attorney. I want to thank the staff at A People’s Choice for the great help they give to everyone in their times of need. Like I was! Thank You.”
R. Leonard
“When my father passed away without a will, we needed help handling the transfer of his assets. Since there weren’t significant assets, I didn’t want to spend too much on the legal paperwork. A People’s Choice offered just the right service we needed. In particular, the staff was very responsive to our document filing needs, helping to turn around corrections almost immediately. They helped to ease a tough situation.”
Michael C.
“I used A People’s Choice for help with a probate matter. My grandfather died Christmas of 2016. He had a living trust, but no one was able to find it. We went to A People’s Choice and we were able to do a probate affidavit to get what was left of my grandfather’s estate. Took two days for the documents to be prepared and the bank accepted them without any questions. Sandy was the one who assisted us, and we really appreciate the help that was provided. A+ service.”
David R.
“A People’s Choice worked on my probate case for over 1 year. Their knowledge, dedication and commitment to clients is exceptional. They prepared all the required legal documents, and all the court filings. They used the e-filing system, which initially I was hesitant about, but I’m so glad they did. It really expedited the process. They always answered my emails in a very timely manner and was always professional. The probate process is long and sometimes seems overwhelming. It’s also very expensive, A People’s Choice saved me thousands of dollars over going to an Attorney. I would highly recommend A People’s Choice for your probate needs, it’s cost effective, and they handle the entire process from beginning to end. They do a great job!”
“A People’s Choice was professional and courteous throughout a long probate process. Probate itself is a frustrating and expensive process; however, everyone I came in contact with at A People’s Choice was exceptionally helpful, patient, and professional. For those entering into the probate process I must warn you that it is difficult to understand but the staff at A People’s Choice makes it as tolerable you could wish for.  The people who work there were kind, efficient, and understanding.  As long as you email them your questions, they will get back to you and they will not make you feel like you are ignorant if you are unclear about any part of the process.”
Marcel B
“I needed help understanding and filling out legal documents, but I didn’t have enough money to pay for an attorney. I searched the internet for a short period of time looking for help and when I found A People’s Choice, I was relieved to know that I would get the exact service that I needed at an affordable price. The staff was very professional and helpful with my legal documents. They worked around my schedule and responded to my emails on a timely manner. They took care of all the paperwork and filing and kept me posted. I would highly recommend A People’s Choice for your legal documents as you will get outstanding service at an affordable price. “
Sharon B.

We help Deal With Creditors and Debts in California Probate!

  • or call 1-800-747-2780

At A People’s Choice, we can help you complete your probate case without having to hire a lawyer. As a legal document assistant, we have filed thousands of probate cases and helped people save hundreds and thousands of dollars in attorneys fees. There are several different ways a personal representative can deal with creditors and debts in California probate and provide the required notice. The first, and most important way is through the required newspaper publication. Our office assists in this critical step.  We can also help in preparing other necessary documents you may need to provide estate creditors and interested parties with official notice about the pending probate. Lastly, we can help you respond to disputed creditor claims. Read on to learn more about the steps required to deal with creditors and debts in California probate.

Estate Creditor Notice

As mentioned above, the estate’s executor or personal representative must notify the estate creditors. In preparing a last will, the deceased may have left paperwork identifying creditors and the amount of debt owed. During the probate process, the estate’s representative must take precautionary steps to pay all creditors the proper amount owed. In this regard, the court can hold the personal representative liable if they pay a party not permitted under probate law.

Simple Steps to Deal With Creditors and Debts in California Probate

Here are the steps required to deal with creditors and debts in California probate.

  1. Complete forms Notice of Administration to Creditors Form DE-157 and Creditor’s Claim form DE 172 to start the noticing process.
  2. Serve all known creditors Notice. Keep in mind, some state agencies need separate and particular notice. For example, the personal representative should notify the California Department of Health Care Services if the decedent was on Medi-Cal. The Director of the California Victim Compensation and Government Claims Board must receive notice if one of the decedent’s heirs or beneficiaries is or was confined in a state prison or any county or city jail. Lastly, the representative will need to send notice to the California Franchise Tax Board within 90 days of the Court Clerk issuing formal Letters.
  3. Monitor the court’s website to see if a creditor files a claim in the probate case. If a creditor files a formal claim, the personal representative can take one of three actions: (a) accept the claim, (b) reject the claim or (c) ignore the claim.  When accepting the claim, the personal representative agrees to pay the amount due. If they reject the claim, the representative will need to file formal notice that they partially or fully dispute the debt. Keep in mind, if a creditor is not aware of the administration of an estate, Probate Code Section 9103 allows them to ask the court permission to file a late claim.

If the personal representative ignores the claim or formally disputes the claim, it is up to the creditor to file a formal lawsuit within 90 days of the personal representative rejecting or ignoring the claim.

Paying Valid Claims

  1. Once the personal representative receives all claims, they need to determine if there is enough money to pay the debts. Some debts have priority such as federal and estate taxes; then probate costs; then funeral costs and lastly creditors. It should be noted if the personal representative has enough money in the estate and there are sufficient funds set aside to pay the administrative expenses, Probate Code Section 11421 requires the personal representative to pay the decedent’s funeral expenses, costs of decedent’s last illness, family allowance, and wage claims. It is usually best to wait until the credit claim period has expired before paying other types of debts.
  2. Pay all valid claims. This would include credit card debts, utility bills, and other items.

What Happens If There Is Not Enough Money in the Estate?

If the estate does not have enough money, the personal representative may have to prorate the amount left between similar creditors. Remember, some creditors have priority, so this apportionment only occurs within creditor “groups.” Here is an example. An estate has $60,000 in debt. $20,000 is owed in taxes, $10,000 for funeral expenses and $30,000 in general creditors. The estate only has $35,000 available to pay debts. The $20,000 tax debt is paid first, then the $10,000 funeral expenses, leaving only $5,000 to divide between the general creditors. In some insolvent estates, the general creditors may receive nothing.

As mentioned above, if you are not sure about the decedent’s debts, wait until the end of the claim filing period before paying any claims. Then you will know the exact total of the creditor’s claims filed. Remember, the claim filing period ends either four months after the court clerk issues Letters OR sixty days after mailing the Notice of Administration, whichever occurs last.

Unfortunately, if an estate is insolvent, the heirs and beneficiaries will not receive anything. If the decedent’s will gifts them specific property or money, these gifts will expire. A beneficiary or heir can only receive probate assets if there is money left over in the estate after the personal representative pays all valid debts.

A General Overview

As discussed above, when the representative rejects a creditor’s claim, notice must be provided and served on the creditor. The creditor can file a claim against the estate within 90 days of the rejection. The court will conduct a subsequent hearing in front of a judge to assess, validate and/or deny all creditors claims.

There are other claims in probate that decedent’s creditors or relatives may assert. These include funeral expenses, spouse award, dependent child award, monies owed to the decedent’s employees. Interested beneficiaries may also file claims about the distribution of property.

The claims process usually lasts between 60 – 90 days. At A People’s Choice, if necessary, we can help you deal with creditors and debts in your California probate. As mentioned above, the personal representative must provide notice to creditors by publication in a local newspaper. The personal representative may need to complete other documents if they later discover other creditors after the first notice.

Using a Legal Document Assistant for Help

This is a general overview of how to deal with creditors and debts in California probate. More importantly, you should not consider this article as legal advice for a particular situation. Every probate case is different, and you should talk to an attorney if you need legal help about specific issues.

As far as the paperwork goes, however, we highly recommend you consider working with an experienced legal document preparer. As such, A People’s Choice is a great option for your probate document preparation. A Peoples Choice has been in business since 1980, helping people file California probate and other types of legal documents. As such, our staff understands the detail and time-sensitive nature of these cases. As a legal document assistant, we can help you deal with creditors and debts in California probate. Call us today at 800-747-2780 or contact us through our website.

Get help with your Legal documents today!

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By |2019-05-12T09:13:33-07:00September 3rd, 2018|Probate|0 Comments

About the Author:

Sandra M. McCarthy, founder of A People’s Choice Inc., has worked exclusively in the legal field since 1976. She served as the 2004-2005 President of CALDA (California Association of Legal Document Assistants). She obtained a Paralegal Certificate from the University of California, Santa Barbara. During her career in the legal field, she has worked as a freelance paralegal, law office manager and paralegal studies teacher, and has co-authored numerous legal publications and written hundreds of self-help legal articles. As a registered Legal Document Assistant, Sandy is dedicated to providing affordable, low-cost, self-help document preparation services for California consumers in all 58 counties.

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