When someone dies, in what order are creditors paid?

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When someone dies, in what order are creditors paid?

My brother died without a Will; he had $2,000 and a car when he died. I paid his funeral expenses and I know there are a lot of medical bills. Who will get their money first, me or the doctors and hospitals? He lived in OK; I live in KS. I would like to be able to sell the car and get to the small amount of cash he had.

Asked on December 16, 2010 under Estate Planning, Kansas

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I am so sorry for your loss.  Your brother dies what is known as "intestate," which is without a last Will and Testament.  Therefore, the intestacy statutes in the State of Oklahoma will govern how his estate is distributed.  Now, every state has a process of proceeding for a Small Estate that requires less to do than with a larger estate.  You did not say here if he was married or had children or if your parents are alive or if you have other siblings.  All this matters when discussing the estate proceeds.  Also, his estate will be responsible for his medical bills and yes, it is possible for an estate to be insolvent and to file for bankruptcy to eliminate the debt.  Fortunately, in most states the payment of the funeral bill takes priority before any other creditor.  So you should be reimbursed for that.  But as for the rest of the proceeds and the sale of the car, that is questionable.  Seek some guidance on this matter.  Good luck.


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