Creditor Claims

With respect to creditors, probate is a process both to protect creditors of the dead person and to impose a deadline on creditors for making a claim for unsecured debts. Relatives of the dead person are only responsible for the dead person’s debts to the extent that they inherit from the dead person. In the last sentence the word “inherit” is used in the common sense to include receiving money from a bank account that is payable on death even though that money did not go through probate.

After a person successfully petitions to be appointed the personal representative of an estate (either Administrator or Executor) they need to file a Notice to Creditors—typically the attorney does this. In Nevada if the estate is under $300,000 the Notice to Creditors says that any creditor has 60 days to file a claim against the estate. If the estate is over $300,000 the notice will say there is a 90 day deadline to file a claim against the estate. If we are not sure if the estate will be worth more than $300,000 we file a 90 day Notice to Creditors to save the expense of having to later file a second Notice to Creditors if the estate turns out to be worth more than $300,000.

This Notice to Creditors must be published in a local newspaper. In Clark County, we publish in the Nevada Legal News which typically charges $80 as of February, 2025. In other counties the publication is usually more expensive. This publication is considered sufficient to run the deadline on UNKNOWN creditors. If a possible creditor claim is known to the personal representative, the personal representative should mail a copy of the Notice to Creditors to that person if the personal representative wants to possibly challenge the claim in whole or part.
 

Secured vs. Unsecured Creditors:

If there is a mortgage or a mechanic’s lien or HOA arrearages or taxes owed on a house, these claims are secured by the house and the house can’t be sold without these creditors getting paid. They don’t need to worry about filing a creditor’s claim or about a 90 day Notice to Creditors cutting off their claim. If a car is financed and payments cease when the owner dies, if the finance company might repossesses the car and sell it. If the finance company is the hole after selling the car, then it has an unsecured claim against the estate for the balance of its claim.
 

Credit Cards:

The most common creditor claims against an estate involve credit cards and these are unsecured debts. Some credit card issuers use services such as DCM Services or Ascension Point to monitor probate filings. These two companies, among others, file a Creditor’s Claim as soon as a probate petition is filed. Interest and late charges on credit cards cut off on the date of the person’s death.
 

Compromising Creditor Claims:

Credit Card debts and the like can usually be compromised. After the Notice to Creditor period has run, if the probate estate has sufficient funds, or one or more estate beneficiaries has sufficient funds, an offer can be made to compromise the claim a discount. Usually this will be accepted.