Most people in New Jersey will die with some amount of consumer debt. In fact, according to the New York Federal Reserve, it is believed that 75% of Americans will die in debt. Figuring out who is responsible for that debt may lead to estate litigation.
Generally, when a person dies, any financial obligations he or she may have are paid by the estate. This means that any positive assets may be utilized to cover the debts owed. This way, beneficiaries are not left paying off the decedent’s creditors at their own expense. Accounts with joint owners will not be immediately paid from the estate. The responsibility of repayment falls on the remaining account owner.
Before an estate can be distributed to beneficiaries, creditors have to be allowed to make their claims. There is a set period of time in which they must do this. If they try to file claims after the time limit is up, they are usually out of luck — unless, of course, the executor failed to inform them of the death in a timely manner.
When closing out a loved one’s estate, creditor claims may be made that seem questionable. It is always good to investigate before just handing over money. Those who wish to fight any creditor claims may do so with the assistance of an experienced estate litigation attorney. Such issues may be handled in a New Jersey probate court, or they may be settled without having to go before a judge. Every case is different, so how this type of issue needs to be approached will vary based on a number of factors.