Collecting A Debt From A Colorado Probate Estate
Knowing how to collect a debt from a Colorado probate estate can be useful information, especially if a substantial amount of money is owed. Medical bills, credit card debt, child support debt and other unsecured debt is extinguished simply because the creditor does not know the rules or somehow violates the rules.
Here are a few rules to remember when trying to collect a debt from a Colorado probate estate.
Hiring a Qualified Colorado Probate Attorney
The first rule to remember is that getting assistance from a Colorado probate attorney is probably a good idea. While this statement may be self-serving on our part, it is impossible to fully explain all the rules about collecting a debt from a Colorado probate estate, and the rules will change over time.
Knowing the Requirements for Collecting Debt from a Colorado Probate Estate
In a Colorado probate estate, the goal is to quickly wrap up the affairs of the deceased. In order to do that, there are strict rules about how a creditor must proceed and the time period in which certain steps must be taken. Even a slight violation of these rules usually results in the creditor’s claim being extinguished.
To collect a debt from a Colorado probate estate requires:
(1) Knowing When and Where an Individual Died
Knowing when and where an individual has died can be quite difficult. A creditor can check the social security number against the social security master death index. If the creditor does not know the social security number, using a search engine like google or yahoo to check the person’s name can yield results. The problem is that when a person dies, a clock starts ticking away the time a person has to file the claim for the debt against the Colorado probate estate. That clock can be as short as four months and seldom longer than one year. As a general rule, one year after a person has died, an unsecured debt cannot be collected from a Colorado probate estate.
(2) Knowing Where the Colorado Probate Estate was Opened
After determining that an individual has died and where he died, the next step is finding out where the Colorado probate estate was opened. Usually, the Colorado probate estate is opened where the person lived just before he died. However, the Colorado probate estate could be opened in any one of sixty or more Colorado counties. Finding out in which county the Colorado probate estate was opened can be time consuming and difficult. Some counties charge a five-dollar fee to check their records. Other counties will let a creditor just call up and ask. All of this takes time. The time period in which the claim must be filed in the Colorado probate estate can pass before the estate is even located.
(3) Properly Filing a Claim for the Debt in the Colorado Probate Estate
What if there is no Colorado probate estate? Many people avoid Colorado probate through revocable trusts, payable on death accounts and joint tenancy law. Other times the opening of the estate is intentionally delayed until one year after date of death specifically to extinguish unsecured creditor claims.
If a Colorado probate estate cannot be located, the solution is for the creditor to open the Colorado probate estate. There are numerous, strategic decisions that go into making this decision. Suffice it to say that hiring a Colorado probate attorney is a must in this situation.
If the Colorado probate estate is opened, a proper claim must be filed in order to collect a debt from the Colorado probate estate. Filing a “proper†claim against the Colorado probate estate is more difficult than it sounds. There are strict, complicated rules about how, when and where the claim must be filed. Those rules can be found in C.R.S. 15-12-804. If you want to go it alone without the help of legal counsel, a creditor can purchase a copy of those rules and a claims form, here.
(4) The Claim being Allowed by the Colorado personal representative (the Person in Charge of the Estate)
Once a claim is properly filed, the person in charge of the Colorado probate estate will (1) allow the claim, (2) disallow the claim or (3) do nothing. Doing nothing is the equivalent of allowing the claim to collect the debt from the Colorado probate estate. In our experience, seldom is a claim formally allowed unless a petition to allow the claim has been filed by the creditor.
If the claim to collect the debt from the Colorado probate estate is disallowed, the creditor must file a petition to allow the claim within a specified time period (usually 60 days from the date the claim was disallowed) to preserve the creditor’s rights. That time period is usually stated on the notice of disallowance. Failure to file a claim within the stated time period will preclude recovery of the debt from the Colorado probate estate.
Just because a creditor’s claim is allowed does not mean the creditor will get paid. Conversely, just because there are no assets or not enough assets in the Colorado probate estate does not mean that the debt against the Colorado probate estate cannot be paid. See our previous article about bringing nonprobate assets back into the estate to pay Colorado probate claims.
If it is not apparent by now, collecting a debt from a Colorado probate estate can be complicated. This is one area where hiring a Colorado probate attorney is really a good idea.
