When There Is Not Enough Money to Pay Off Debts
An executor has an important job of settling the estate of the deceased. You must pay legitimate debts, which are funeral expenses, income taxes and medical bills. If you do not have enough money to pay off debts and taxes, then you should talk to a probate attorney in Las Vegas immediately. It is the law that some creditors must be paid first over others.
It is called an insolvent estate when the debts outweigh the assets. Money is owed to the creditors. The executor should not rush and start paying off debts. The law requires that certain creditors must be paid in a specific order of priority. If you pay the wrong creditors first, then you can be held personally liable for the debts.
Get an Insolvency Administration Order
The executor must ask the court for an insolvency administration order. This order allows you to settle the debts of the estate. The creditors also can apply for an insolvency administration order. However, they must demonstrate the estate is insolvent.
Creditors can appoint an interim receiver to protect the assets as well. The interim receiver can serve in this position until the case goes to court. A probate lawyer can help you protect your assets in this situation.
Hierarchy of Payment
It helps to know the type of debts the law required to be paid first. You must pay the debts in this order. This order includes secured creditors, funeral expenses, testamentary expenses, and any other debts.
If the deceased gifts money to beneficiaries, then the creditors can come after this money. It can be frustrating when dealing with an insolvent estate. You should talk to a probate lawyer to determine how to proceed.