Ok first some basics, in the state of Florida, creditors of a deceased individual may file a claim against the estate to recover debts that are owed to them. The process for filing a creditor claim in a probate proceeding is outlined in Florida Statutes, Chapter 733.
Under Florida law, a creditor must file a claim against the estate within three months after the date of service of a copy of the notice to creditors, or within 30 days after the first publication of the notice to creditors, whichever is later. A creditor may also file a claim at any time before the estate is fully administered so long as the creditor is deemed to be reasonably ascertainable. All creditor claims are barred by law after two years from the decedent’s death.
When a creditor files a claim against the estate, the personal representative of the estate must review the claim to determine its validity. If the claim is valid, the personal representative must pay the claim out of the assets of the estate. If the claim is disputed, the personal representative must file a notice of contest with the court and the creditor may file a lawsuit to seek a judgment in their favor.
PRACTICAL TIPS FOR DEALING WITH CREDITORS IN FLORIDA PROBATES
- Notify creditors of the probate proceeding: It is important to notify creditors of the probate proceeding as soon as possible. This can be done by publishing a notice to creditors in a local newspaper and by serving a notice to creditors on known creditors.
- Keep accurate records: Keep accurate records of all debts and claims against the estate, including creditor contact information and the amount of the claim. This will help you manage and resolve creditor claims in a timely and efficient manner.
- Review creditor claims carefully: Review creditor claims carefully to ensure that they are valid and the amount claimed is accurate. If a claim is disputed, it is important to follow the proper procedures for contesting the claim and seek the advice of a qualified attorney.
- Pay creditor claims in order of priority: Creditor claims are typically paid in order of priority, with certain types of claims taking precedence over others. It is important to familiarize yourself with the order of priority for creditor claims and pay them accordingly. Do not pay any claims until you have been provided consent/authority from your counsel.
- Communicate with creditors: Keep creditors informed of the progress of the probate proceeding and the status of their claim. This can help to avoid misunderstandings and reduce the risk of disputes.
- Use estate assets to pay creditor claims: Use the assets of the estate to pay creditor claims in a timely manner. This will help to protect the reputation of the estate and avoid disputes with creditors.
- Consider negotiating with creditors: If the assets of the estate are insufficient to pay all creditor claims in full, you may want to consider negotiating with creditors to come to an agreement on a partial payment or settlement of the claim.
- Follow the rules and procedures for probate: It is important to follow the rules and procedures for probate, including the deadline for filing creditor claims and the process for contesting or paying creditor claims. Failing to follow these rules and procedures can result in delays or disputes in the probate process.
It is crucial that creditor claims be paid in accordance with Florida Law. Florida Statute 733.707 is a provision of the state’s probate code that outlines the order of payment of expenses and obligations in the administration of an estate in Florida. Under this statute, the personal representative of the estate is responsible for paying the expenses of the administration and the obligations of the estate in the following order:
- Class 1: Costs, expenses of administration, and compensation of personal representatives and their attorneys fees and attorneys fees awarded under Florida Statute 733.106(3).
- Class 2: Reasonable funeral, interment, and grave marker expenses, not to exceed the aggregate of $6,000.
- Class 3: Debts and taxes with preference under federal law, claims under certain state statutes, and claims in favor of the state for unpaid court costs, fees, or fines.
- Class 4: Reasonable and necessary medical and hospital expenses of the last 60 days of the last illness of the decedent, including compensation of persons attending the decedent.
- Class 5: Family allowance.
- Class 6: Arrearage from court-ordered child support.
- Class 7: Debts acquired after death by the continuation of the decedent’s business, to the extent of the assets of that business.
- Class 8: All other claims, including those founded on judgments or decrees rendered against the decedent during the decedent’s lifetime, and any excess over the sums allowed in Class 2 and Class 4.
If the assets of the estate are insufficient to pay all claims in a particular class, creditors of that class will be paid ratably in proportion to their respective claims. The personal representative must pay the expenses of the administration and obligations of the decedent’s estate in this order, unless a different order is prescribed. In other words if a claim is paid out of order it will have serious consequences for the Personal Representative as Florida law requires strict compliance with these rules.
Finally understand that these classes are designed to protect an incentivize people to complete a Probate proceeding. Even if the resources in your Estate are insufficient to pay all creditor claims you first get back Class one expenses, attorney fees, PR commission, funeral bill and other related expenses.
If you are dealing with creditor claims in the administration of an estate in Florida, it is important to seek the advice of a qualified attorney who can provide specific guidance based on your individual situation and the laws of your jurisdiction.
Dealing with creditor claims in a probate proceeding can be complex and is governed by specific laws and procedures. It is important to understand your rights and responsibilities as the personal representative of the estate and to follow the proper procedures for managing and resolving creditor claims.
If you are in need of assistance with creditor claims or have any other legal questions related to probate in Florida, we encourage you to call us at 813-501-5071 for more information we Probate cases statewide and offer free no obligation consultations.