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Collecting the debt for a creditor from a Colorado estate

When a person passes away, he or she usually leaves behind not only assets, but also valid debts and liabilities. At our law firm, we sometimes represent creditors trying to collect debts that survive the deaths of the deceased people who became liable for those debts during their lifetimes. 

Debts that usually survive death can be of many types, including loans, bills for services or goods, credit cards, some private student loans and others, depending on the type of liability, applicable law and terms of the contract.

We help creditors to present their claims to the personal representatives of the decedents’ estates for payment. In some situations, these claims against estates end up in litigation. 

State probate laws 

Colorado statutes heavily regulate claims against the assets in a deceased person’s estate. The laws set out in detail requirements about: 

  • Personal representative publication of notice or written notice to creditors
  • Deadlines for presentation of claims to the personal representative of the estate or to the clerk of court
  • Information that the claim must include and correct format
  • Procedure for personal representative’s disallowance or partial disallowance of claims
  • Order of priority by type of debt for payment of allowed claims
  • Deadlines for payment of allowed claims, plus interest 

Other procedures may apply to some debts secured by real estate or other property, and for debts that arise against the estate after the decedent’s death. 

If no other eligible party has opened a probate process, a creditor has standing to initiate the estate proceeding so that the creditor has an estate to which to present its claim. 

Remedies outside the estate 

If the debt is that of a wealthy person who may have established various trusts during his or her lifetime and transferred assets to those trusts, it may be possible, but more challenging, to reach those assets within trusts to pay off debt outside of the decedent’s estate in Colorado probate court. An experienced attorney can advise a creditor seeking to reach those trust assets to satisfy a debt what legal remedies may be available and help the creditor to access those assets. 

In another scenario, the decedent may have given assets away during his or her lifetime as gifts, leaving insufficient funds in his or her estate to satisfy a creditor’s claim. In such a case, a lawyer can analyze whether a lawsuit might be available as a remedy for having the court set aside the gift transfer and make the money or asset available to satisfy the debt instead, under certain circumstances. 

This blog post introduces a complex topic about which an attorney can answer questions in more detail.

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