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  HAROUTUNIAN LAW OFFICE

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How to Negotiate with Estate Creditors

10/30/2017

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​Question:         I am probating my Father’s estate.  I received letters from creditors who I don’t recognize.  I am familiar with his financial history.  I requested proof of the debt and got a list of old expenses.  They may be legit, but I can’t be sure.  How do I handle these? 
 
Answer:           A doubting personal representative of an estate has a few options, when dealing with creditors:
 
• Pay the debt, but risk that your family may object, later – remember, you are the “team captain” but subject to the will of the team (aka: the estate’s heirs or devisees).  Don’t go volunteering the team’s money to pay expenses which may not be legitimate. 
 
•  You can get advance approval from the Probate Court.  Here, you will give the team a chance to dispute.  Otherwise, if they don’t you will be authorized to pay the debt.
 
• You can “compromise the debt” by negotiating a resolution.  This can happen with or without Probate Court oversight. 
 
• Finally, you refuse to pay and defend any lawsuit brought by the creditor.  This lawsuit will likely be in the District or Superior Court, but must happen within a year from the date of death.
 
Use common sense and avoid spending a huge amount of your time, and racking up your personal rep. fees and legal fees.  That creates a double whammy expense for the estate’s beneficiaries.
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