When a loved one dies, one of the most important parts of settling their estate involves dealing with any outstanding debts. Creditors don’t disappear when someone passes—there’s a legal process that allows them to request payment from the estate. If you’re involved in handling a loved one’s affairs, it’s important to know what steps to take, what deadlines matter, and how to respond to creditor claims appropriately.
Identify Known And Potential Creditors
Before we can move forward with any payments, we need to understand what debts exist. That usually starts with reviewing the decedent’s mail, email accounts, financial records, and credit reports. We’re looking for credit cards, medical bills, personal loans, car payments, or any other liabilities the person may have had.
Once we gather this information, we can begin to build a list of known creditors. In some cases, there may also be creditors we aren’t aware of yet. That’s where public notice comes in—posting notice to creditors gives them a formal opportunity to submit claims to the estate.
Publish Notice To Creditors
Under Colorado probate law, the personal representative of the estate is typically required to publish a notice to creditors in a local newspaper. This serves as a public alert that the estate is being administered and gives creditors a set amount of time—usually four months—to file claims.
This notice helps limit the time creditors have to act. If a creditor fails to come forward within the allowed time frame, their right to collect may be cut off. As your Colorado probate lawyer, we assist clients in making sure these steps are completed accurately and on schedule.
Review And Evaluate Claims
When creditor claims come in, we don’t automatically pay them. Each claim needs to be reviewed to confirm that it’s valid and that the amount is correct. Some debts may already have been paid, others may not be enforceable, and in some cases, the estate may not be responsible for certain types of debt.
If we believe a claim is incorrect or invalid, the personal representative can object. This may lead to further discussion or even court involvement, depending on how the creditor responds. Keeping records of all notices, claims, and responses is important in case questions arise later.
Pay Debts In The Right Order
Estate debts must be paid in a specific legal order. For example, administrative costs such as court fees or attorney fees often come first. After that, funeral expenses, taxes, and secured debts like mortgages or car loans are given priority. Unsecured debts, like credit cards or personal loans, are usually paid last.
If there aren’t enough assets to cover everything, the estate may be considered insolvent. In that case, we follow the legal order of payment, and some creditors may not receive the full amount owed—or anything at all. Heirs are not personally responsible for the decedent’s debts unless they co-signed or are otherwise legally obligated.
Let Us Help You Manage The Process
Settling debts after someone passes away is a key part of probate and should be handled with care. It’s about following legal procedures, protecting the estate, and making sure everything is accounted for. At W.B. Moore Law, we help personal representatives and families understand how to approach this part of the process with confidence. If you’re unsure what to do next or want to make sure everything is handled the right way, contact us today to schedule a consultation. We’re here to help you move forward with peace of mind.