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  1. #11
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    97,142

    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting Rock Knocker
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    I really don't see how that will happen. He has $6K in cash and equity, and approximately $12K+ in debt. Not sure that a creditor would want to settle knowing that there is some money in the form of the car left on the table.
    With very small estates, it's not unusual for unsecured creditors to agree to take something as opposed to having to incur the cost of probating the estate themselves at risk of receiving little to nothing, or by forcing measures in probate that could similarly result in their receiving less money or nothing, and sometimes creditors don't file timely claims with the probate court.

    Probating the estate will result in reimbursement of funeral costs, which is certainly better than nothing. Assuming there is only one legal beneficiary, the heir who paid for the funeral, that heir might also be able to walk away with more money than that basic reimbursement.

    If that person, again assuming them to be the sole heir, works out deals with all of the possible creditors of the estate (save for the auto lender) such that they're all paid in full for considerably less than the amount presently due, it may be possible for the person to use proof of settlement and payment (along with payment in full of the auto loan) to transfer the vehicle without probate, and to similarly transfer the cash. But they may find themselves fronting more money for the estate, because (assuming "cash" refers to money held in a bank account) with outstanding creditors and no letters of authority from a court they should anticipate finding that the bank won't release the decedent's money to them.

  2. #12
    Join Date
    Oct 2006
    Posts
    13,858

    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting ceeeffoh
    View Post
    Thank you. I told all the issues to my friend, who said he will call the creditors and will try to settle this matter before the car, which is basically everything in the estate, is sold.
    Just to clarify...walking away from the whole thing means treating everything as if its not his problem. It means not selling the car, not getting the bank account, not calling any of the creditors, not offering the creditors anything...it means just walking away.

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