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  1. #1
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    Jan 2018
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    Default Settling Debt for a Very Tiny Estate

    My question involves estate proceedings in the state of: CA

    The mother of a friend of mine died 10 weeks ago.

    She left a very tiny estate, of $3,000 in cash and a vehicle with a value of $6,000.

    She also left some debts

    Remaining debt on the vehicle $3,300

    Short term loan A $530
    Short term loan B $6,800

    Store card A $920
    Store card B - unknown, but no more than $1,000
    Store card C - $600

    Total debt
    Secured $3,300
    Unsecured $8,850 - $9,850

    Total debt $12,350 - $13,550

    My friend wants to know how much he can collect, given that her debt exceeds her estate.

    What should be done about it? Thank you

  2. #2
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    Default Re: Settling Debt for a Very Tiny Estate

    The process of transfer of assets by affidavit does not work with vehicles. If he probates the estate, the estate can sell the vehicle, pay off the loan, and provide notice to creditors. The priority debts for the estate will be funeral and burial costs, and the cost of administration, which will likely consume most or all of the @$5,700 in estate assets.

  3. #3
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting Mr. Knowitall
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    The process of transfer of assets by affidavit does not work with vehicles. If he probates the estate, the estate can sell the vehicle, pay off the loan, and provide notice to creditors. The priority debts for the estate will be funeral and burial costs, and the cost of administration, which will likely consume most or all of the @$5,700 in estate assets.
    He paid the funeral costs from his own pocket so that is not an issue. I believe the estate is too tiny for CA probates, which is why I am asking this question.

  4. #4
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    Default Re: Settling Debt for a Very Tiny Estate

    No estate is too tiny for probate. There exists a simpler procedure that CAN be used for small estates.

  5. #5
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting Mr. Knowitall
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    The process of transfer of assets by affidavit does not work with vehicles. If he probates the estate, the estate can sell the vehicle, pay off the loan, and provide notice to creditors. The priority debts for the estate will be funeral and burial costs, and the cost of administration, which will likely consume most or all of the @$5,700 in estate assets.

    To the OP, here is a succicient answer to your question.

    Quote Quoting ceeeffoh
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    My friend wants to know how much he can collect, given that her debt exceeds her estate.
    The general order:
    (a) Debts shall be paid in the following order of priority among classes of debts, except that debts owed to the United States or to this state that have preference under the laws of the United States or of this state shall be given the preference required by such laws:
    (1) Expenses of administration. With respect to obligations secured by mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, only those expenses of administration incurred that are reasonably related to the administration of that property by which obligations are secured shall be given priority over these obligations.
    (2) Obligations secured by a mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, in the order of their priority, so far as they may be paid out of the proceeds of the property subject to the lien. If the proceeds are insufficient, the part of the obligation remaining unsatisfied shall be classed with general debts.
    (3) Funeral expenses.
    (4) Expenses of last illness.
    (5) Family allowance.
    (6) Wage claims.
    (7) General debts, including judgments not secured by a lien and all other debts not included in a prior class.
    (b) Except as otherwise provided by statute, the debts of each class are without preference or priority one over another. No debt of any class may be paid until all those of prior classes are paid in full. If property in the estate is insufficient to pay all debts of any class in full, each debt in that class shall be paid a proportionate share.
    https://leginfo.legislature.ca.gov/f...er=2.&article=
    https://law.justia.com/codes/califor...6540-6545.html
    http://www.courts.ca.gov/10440.htm

  6. #6
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    Jan 2018
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    Default Re: Settling Debt for a Very Tiny Estate

    This is what i have found for tiny estates

    >The California Probate Code provides that probate estates of $150,000 or less do not need to be probated

    Instead the heir could issue an affidavit. Do you think a probate is still needed?

    There is no other heir, the funeral cost already paid, and my friend just wants to know whether he can collect the sum from the sale of the vehicle which is the only asset in play, and going into probates will probably consume all of the proceeds.

    Is there a good way to end this asap without too much pain and expenses?

  7. #7
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    Default Re: Settling Debt for a Very Tiny Estate

    The process for transferring a vehicle by affidavit is possible in some cases, but it is not necessarily the case that the vehicle can be transferred by affidavit even if the estate is small, and it is first necessary to pay off or discharge any car loan as well as to certify that you have paid off or otherwise resolved the estate's debts to any unsecured creditors; see the DMV form for that purpose.

  8. #8
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    Default Re: Settling Debt for a Very Tiny Estate

    Like Mr KIA said, they'll more than likely have to settle with the unsecured creditors (if they make a claim). There will probably be zero left for any heirs.

  9. #9
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting ceeeffoh
    View Post
    This is what i have found for tiny estates

    >The California Probate Code provides that probate estates of $150,000 or less do not need to be probated

    Instead the heir could issue an affidavit. Do you think a probate is still needed?

    There is no other heir, the funeral cost already paid, and my friend just wants to know whether he can collect the sum from the sale of the vehicle which is the only asset in play, and going into probates will probably consume all of the proceeds.

    Is there a good way to end this asap without too much pain and expenses?
    Yes, because the estate is insolvent he could just walk away from it.

  10. #10
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    Jun 2017
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting llworking
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    Yes, because the estate is insolvent he could just walk away from it.
    He can get reimbursed for the funeral and death expenses if he doesn't walk away, because those are higher in the food chain than unsecured debt

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