What to do about the debts of an estate?
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What to do about the debts of an estate?
My brother passed away last week. He had a checking account with $2800 which was released to my mother, which she partially used to pay for his funeral. He has a car payment with a balance of $3054; the car is worth about $6000. He has numerous outstanding medical bills, owes the IRS, owes the state unemployment offiice – nonfault overpayment of benefits. I am cancelling his utilites, cell phone, etc. tomorrow but there will be money due. There is no money to pay these bills. The car payment is due next week. What happens to this debt since he has no money. He was never married. Should we make the next payment on the car and try to sell it for a profit or just let them repossess it. He owes more than the possible $3000 profit.
Asked on October 14, 2012 under Estate Planning, Pennsylvania
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If your brother died with a Will or without one you should do a probate or an intestate proceeding where you file a petition with the court ansd serve all known creditors with its notice. Creditor's ordinarily have six (6) months to file a creditor's claim with respect to the estate. If there is not enough assets for the estate to pay all creditors, the court orders payment on a pro rata basis. As to the car, if it is worth more than what is owed on it, I suggest that you make the next payment and then try and sell it to pull some equity from it.
I suggest that you may want to consult with a Wills and trust attorney to help you in the matter you have written about.
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