Presentation on theme: "[already covered] Creditor must file a claim: With PR or court, and PC §§ 298, 308 EC §§ 355.001, 355.002 With supporting affidavit (under oath) containing."— Presentation transcript:
Must present claim for money and have it rejected before creditor can receive a court judgment. PC §§ 314 EC §§ 355.065 Unliquidated claims do not have to be presented. Question 5 – p. 151
General Rule – Any time before: Estate closed, or Statute of limitations runs PC § 298 EC §§ 355.001
Exception for unsecured creditor who received notice 4 months after receipt of notice (PC § 298) 120 days after receipt of notice (EC § 355.060)
Types of Claims Mortgage Deed of trust Article 9 secured interest Creditor has choice of how to proceed.
1. Preferred Debt and Lien Against the Collateral PC § 306(d) EC § 355.154 CR gets top priority over the collateral, now and later in the hands of purchasers, heirs, and beneficiaries. But, no right to deficiency if undersecured. Presumed if no timely election.
2. Matured Secured Claim PC § 306(c), (c-1) EC § 355.153 CR must subordinate claim to: First $15,000 of funeral and last illness expenses Family allowance Administration and other estate expenses But, may recover deficiency from other estate assets. Must be timely elected.
If creditor elects matured secured claim status, creditor can get paid now even though debt is not yet due. Why is this permitted? How does a creditor make the decision?
Time for Creditor Election Later of: Four months after receipt of notice, 0r Six months after letters issued.
Timing Must act within 30 days. PC § 309 EC § 355.051 Three options
1. Accept PR agrees that the claim is valid. Does NOT mean claim will get paid (might not be enough property in the estate).
2. Reject PR states PR will not pay the claim (thinks it is bogus). Creditor must file suit with 90 days of rejection or else claim is barred. PC § 313 EC § 355.064
3. Do nothing Claim is deemed rejected if PR does nothing within 30 days PC § 310 EC § 355.052 Warning to creditor: This starts the running of the 90 day period to file suit. Ethics of advising PR to do nothing to trick non-savvy creditors?
The following rules do NOT apply: 1. No requirement with respect to form in which creditor must present claim (affidavit not needed). 2. No requirement that claim be presented before suit. 3. 90 day period for suing on rejected claim does not apply.
Creditor may seek recovery from heirs, beneficiaries, and lower-ranked creditors up to amount received from the estate. Exceptions: Claim barred by statute of limitations Claim barred by the non-claim statute