Claims of creditors in a probate matter

 Claims of creditors in a probate matter

    Creditors of the decedent have nine (9) months from the date of death to present a claim for payment. If a claim is disputed, the Executor must send notice in writing to the creditor declaring that the claim is disputed and telling the creditor to establish the claim through a  court action. 

The creditor has three (3) months thereafter to file a lawsuit. Failure to obtain a court judgement establishing the claim may serve as a bar to its payment. This is not an absolute bar; however, and a claimant may still try to establish a claim within the longer statute of limitations period applicable to the debt. In addition, after all assets are distributed, a creditor may still file an action for claim sanctification under the refunding bonds signed by each beneficiary. Absent judgement claims may continue until the applicable statute of limitations period has run. The advice of an attorney may be needed to resolve creditors' claims.

         Note: This does not apply to Medicaid, taxes or many government debts

Do I have to pay all claims?

        If claims are made, the Executor/Administrator does not have to automatically accept the claims but can dispute them if there is a legal basis to do so. The Executor/Administrator has three (3) months from the date that the claim is presented to dispute of approve the claim. Failure to timely dispute the claim presumes that the claim is legitimate. Notice of the dispute must be sent in writing to the creditor, along with a notice that the creditor must prove the claim in court. 

Source http://www.co.cumberland.nj.us/content/22602/23182/23384/default.aspx#1

 

      There is no more Notice to Limit Creditors.

      In New Jersey the applicable statute governing insolvent estates is N.J.S.A. 3B:22-2

Order of priority of claims when assets insufficient.   [insolvent estate]

3B:22-2If the applicable assets of the estate are insufficient to pay all claims in full, the personal representative shall make payment in the following order:

   a.   Reasonable funeral expenses;

   b.   Costs and expenses of administration;

   c.   Debts for the reasonable value of services rendered to the decedent by the Office of the Public Guardian for Elderly Adults;

   d.   Debts and taxes with preference under federal law or the laws of this State;

   e.   Reasonable medical and hospital expenses of the last illness of the decedent, including compensation of persons attending him;

   f.   Judgments entered against the decedent according to the priorities of their entries respectively;

   g.   All other claims.

   No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over claims not due. The commencement of an action against the personal representative for the recovery of a debt or claim or the entry of a judgment thereon against the personal representative shall not entitle such debt or claim to preference over others of the same class.