Some Pennsylvania residents pass away while still owing money to other parties. One of the responsibilities of the person who is named the personal representative of the decedent’s estate is to make sure the debts of the estate are paid. In many cases, the decedent’s beneficiaries will not receive their part of the estate until the decedent’s creditors are paid.
Personal representatives must notify creditors
Under Pennsylvania law, the personal representative is required to give creditors the opportunity to come forward with their claims by publishing notices of the estate administration in newspapers circulated in the county where the decedent lived. Ge4nerally, the notices must be in two newspapers for three consecutive weeks. The executor must also notify any creditors they know of.
How do creditors bring a claim against the estate?
Once the notice has been published, creditors will have one year from the date of the first publication to file their claims. Failure to file a creditor claim within one year will limit the creditor to only recovering assets that were not distributed before getting notice of the claim.
A creditor may file their claim with the Register of Wills or submit written notice to the personal representative of the estate. The personal representative must then pay the outstanding claims and then distribute the remaining funds to the beneficiaries of the estate.
In cases where there are not enough funds to pay off the debts, the estate is considered insolvent. If the personal representative believes the estate may be insolvent, they should pay off the creditor claims in order (according to the Pennsylvania Probate, Estates, and Fiduciaries Code, Sec. 3392) until funds run out.
Unfortunately, a person’s death does not erase the debt they owed while they were alive. An attorney with experience in estate administration can help personal representatives resolve creditor claims and properly distribute the funds of the estate.