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  1. #1
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    Default Debt Owed to Estate and Statute of Limitations

    My question involves estate proceedings in the state of: Alabama. I made a promissory note agreement with the decedent many years ago for a loan of money. I am a named heir in the will of the decedent as well. The statute of limitations has long expired for a promissory note in Alabama and there is no language about this loan in the will. The promissory note was discovered by the executor. My questions is this: Can he take the remaining balance from my inheritance even if the statute of limitations has expired on the promissory note?

  2. #2
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    Default Re: Debt Owed to Estate and Statute of Limitations

    Quote Quoting Dlw32211
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    Can he take the remaining balance from my inheritance even if the statute of limitations has expired on the promissory note?
    Yes.

    A statute of limitations is a deadline for filing a lawsuit, not for collecting a debt.

    If a creditor (the estate) can get the money out of you without filing a lawsuit, there is no time limit.

  3. #3
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    Default Re: Debt Owed to Estate and Statute of Limitations

    Quote Quoting Dlw32211
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    My question involves estate proceedings in the state of: Alabama. I made a promissory note agreement with the decedent many years ago for a loan of money. I am a named heir in the will of the decedent as well. The statute of limitations has long expired for a promissory note in Alabama and there is no language about this loan in the will. The promissory note was discovered by the executor. My questions is this: Can he take the remaining balance from my inheritance even if the statute of limitations has expired on the promissory note?
    You really need to consult with a local attorney on this issue, but my layman's guess is that yes, the executor CAN do that. I could however, be wrong which is way you need that consult with a local attorney.

  4. #4
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    Default Re: Debt Owed to Estate and Statute of Limitations

    Quote Quoting adjusterjack
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    Yes.

    A statute of limitations is a deadline for filing a lawsuit, not for collecting a debt.

    If a creditor (the estate) can get the money out of you without filing a lawsuit, there is no time limit.
    Is there anyway the debt could be inadvertently forgiven by certain circumstances? Like showing the decedent had no intention of collecting on the debt. During his final days, he was taken to a nursing home and during that time he order his power of attorney to take care of any of my financial needs, bills etc. Doesn’t this show he had no intention of collecting the debt from me? My brother is the executor and he has not informed me of any actions yet, but I know that he found the promissory note among the financial documents of the estate.

  5. #5
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    Default Re: Debt Owed to Estate and Statute of Limitations

    Quote Quoting adjusterjack
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    Yes.
    Jack, you say that as though you know the Alabama law on the subject. I strongly suspect you don't.

    I researched Alabama law and found no clear answer to that and I can think of arguments against the offset. The estate situation is unique and it may be that the principles that apply to estates would favor against offset. The OP really will need to see an attorney if the executor moves to reduce the inheritance by the amount of the debt from that promissory note.

  6. #6
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    Default Re: Debt Owed to Estate and Statute of Limitations

    I should also add that, as far as I can recall, the note I signed was more of an IOU than promissory note. It was hand written and there was no terms of repayment or interest rate. I think it was mostly an acknowledgement of the loan.

  7. #7
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    Default Re: Debt Owed to Estate and Statute of Limitations

    You really need to consult with a best local attorney on this problem

    Thanks
    Jeffrey Burr Estate Planning and Probate Attorneys

  8. #8
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    Default Re: Debt Owed to Estate and Statute of Limitations

    Quote Quoting Dlw32211
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    I should also add that, as far as I can recall, the note I signed was more of an IOU than promissory note. It was hand written and there was no terms of repayment or interest rate. I think it was mostly an acknowledgement of the loan.
    It's still evidence of the debt no matter how you spin it.

    And while you "might" have a cause of action if the executor actually does the offset (per TM's comment), you'll have to hire a lawyer and go to court over it while the estate has your money. You'll have to decide whether it's worth.

    Bottom line. Nothing stopping him from actually doing it unless you want to go to court in advance and seek an injunction preventing him from doing it. Again, you'll need a lawyer for that. $$$$$.

    Why don't you just accept the fact that you should be paying your debt to the estate. (Not a question.)

  9. #9
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    Default Re: Debt Owed to Estate and Statute of Limitations

    Quote Quoting adjusterjack
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    Why don't you just accept the fact that you should be paying your debt to the estate. (Not a question.)
    The parent never bothered to collect on it for years. If a creditor can't be bothered to try collecting it, then I'll not admonish a debtor for not paying it all these years later. If the parent didn't care about it, then perhaps the parent never really wanted that money back.

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