When it comes to the liabilities of an estate, they can arise in a variety of contexts. Those contexts include:

  • Before a decedent’s death (e.g., credit card debt, mortgages, auto loans)
  • At the time of a decedent’s death (e.g., debt incurred from the illness that caused the decedent’s death, funeral and burial expenses)
  • After the decedent’s death (e.g., administration expenses)

California law requires that all valid creditors’ claims be paid before property is distributed to beneficiaries, and if the administrator or executor of the estate abides by established probate procedures, they generally will repay creditors with valid claims prior to making any distributions. There may be exceptions to this rule in instances where the decedent died with a financially dependent surviving spouse or children.

If an estate did not have sufficient assets to repay the debt or if it contained only enough assets to repay creditors, it is possible estate beneficiaries will receive nothing. Ultimately, how an executor or the court will address a creditor’s claim will depend on the type of claim it is (i.e., secured, unsecured or contingent), whether it was entered according to the state’s nonclaim statutes, and on whether there is sufficient evidence to prove that the decedent owed a debt. 



Creditor Claim Deadlines

One of the primary sources of litigation that arises in probate court has to do with creditors filing late claims. 

In California, in order for a creditor claim on property to be valid, it must be filed within the later of 4 months from the date general letters are issued to a personal representative or 60 days after the date notice of administration is mailed or personally delivered to the creditor. That is unless the court grants the creditor permission to file a late claim. 

Creditor’s claims are also subject to a one-year statute of limitations (i.e., they must be filed within one-year of the debtor’s death). If they are not filed within that time period, they will be time-barred and deemed unenforceable; however, there is a rare exception allowing additional time for surviving spouses bringing a claim against their deceased spouse for breach of fiduciary duty. 

These deadlines are in place to promote speedy estate administration. Creditors should take note that these deadlines may apply even if they were not properly notified of the debtor’s death by the executor or administrator of the estate.

While it will be much more difficult for creditors to obtain repayment of debt if they file a late creditor’s claim, it is nevertheless possible to file a late claim in California under certain circumstances. A probate firm can assist creditors with this challenging process.

Types of Claims

Creditor claims on property vary by type and are prioritized as such. Some of the most common types of creditor claims are covered in this section.

Creditor Claims Arising From Contracts

All claims for money against a decedent based on or arising out of a contract must be presented in a timely filed creditor’s claim. Contract claims can involve ordinary breach of contract causes of action or business disputes, such as an action to dissolve a partnership.

Unmatured or Contingent Claims

Unmatured or contingent creditor claims, respectively, refer to liabilities that have not come due or liabilities that are hypothetical because they are based on a future event that may or may not happen. In California, creditors with unmatured or contingent claims are required to follow the same protocol as creditors with existing claims.

Claims on Actions Pending at Date of Death

Claims on actions pending at the date of death refer to creditor’s claims that had already been raised by the creditor in a lawsuit against the decedent prior to the decedent’s death. A plaintiff in an action against a decedent who had been party to a lawsuit when they died must file a timely creditor’s claim in order to continue the pending action against the decedent’s estate. Failure to timely file a creditor’s claim could lead to dismissal of the creditor’s lawsuit.

If the creditor follows the required procedures for filing a creditor’s claim, and the court grants approval for continuing the pending action, the personal representative of the decedent’s estate or the decedent’s successor in interest will have standing to defend the claim on behalf of the decedent.

Claims on Actions Not Pending at Date of Death

When a creditor has a viable legal claim against a decedent but did not file a lawsuit prior to the decedent’s death, the creditor cannot commence an action against the decedent’s estate without first filing a creditor’s claim. Any action filed against a decedent’s estate that is not in compliance with California’s creditor claim statutes is subject to stay (a ruling to suspend or stop a proceeding temporarily or indefinitely) or dismissal.

Claims for Damages Covered by a Decedent’s Insurance

Claims for damages covered by a decedent’s insurance – which can consist of anything from personal injury claims to auto accident claims – typically do not require the creditor to file a creditor’s claim

If the decedent was liable for damages to another person (i.e., a creditor) at the time they died, and the decedent’s insurance company had agreed to cover the payment, the decedent’s estate (i.e., the personal representative or successor in interest) will generally not be required to join the lawsuit. However, if the alleged damages exceed the decedent’s insurance coverage, the creditor will need to file a creditor’s claim and join the decedent’s estate to enforce their claim.

Claims for Funeral Expenses

When a person dies, if their loved ones decide to hold a funeral, their estate will be held liable for covering funeral expenses. Liabilities arising after a decedent’s death tend to take priority over claims arising before the decedent’s death.

Marvin Claims / Breach of Agreement Claims

Marvin actions and breach of agreement claims arise from a written, verbal or implied financial agreement made between the decedent and another party in which the decedent had agreed for distributions to be made from their estate or trust to the other party after their death. Marvin actions deal specifically with agreements made between a decedent and their unmarried cohabitating partner. 

In both breach of agreement claims and Marvin claims, the surviving party with whom the decedent had made a financial agreement would be considered the creditor. They must file a timely creditor’s claim before seeking enforcement of any such agreement. Keystone’s lawyers litigated a breach of agreement claim brought against its clients in which they not only proved the handwritten note serving as evidence to support the claim was forged but helped their clients reach a resolution that was both favorable and amicable.

Order of Liabilities

As previously mentioned, certain creditor claims take priority over others, and there is usually nothing that can be done to alter the order in which claims are supposed to be paid.

Executors/administrators and/or trustees have to pay debts, including creditor claims, in the following order:


  • Estate administration and/or trust administration expenses
  • Obligations secured by mortgage, deed of trust or other lien (i.e., secured loans)
  • Expenses related to funeral arrangements
  • Medical expenses related to last illness
  • Family allowance (i.e., allowance paid to family members who were financially dependent on the decedent)
  • Wage claims (i.e., employees or contractors of the decedent who had not been paid)
  • All other debts (e.g., credit card debt, debt not secured by liens)

If an estate becomes insolvent prior to paying all of the decedent’s debts, creditors might lack avenues to pursue repayment, although they may be able to pursue certain non-probated assets, such as bank accounts and other non-exempt payable-on-death and transfer-on-death assets to settle the debt.

Likewise, if a creditor is owed money by the beneficiary of a decedent’s estate or trust (i.e., they are a creditor beneficiary), they may be able to pursue beneficiaries’ inheritances for repayment. 

Enforcement of Creditor Claims

How a claim can be enforced will largely depend on the type of claim it is. For instance, liabilities arising from secured loans may not require creditors to enter a creditor’s claim since the loan was backed by collateral, and the creditor can simply reclaim the collateral. Unsecured and contingent claims, on the other hand, can be more complicated to pursue. 

Regardless of the type of claim a creditor has, they can substantially increase the likelihood of a creditor claim being satisfied by hiring a probate lawyer to argue their case.

Enforcing Secured Loans

Creditors who had issued a secured loan to the decedent are likely to recover most, if not all, of their loan. Since secured loans are backed by collateral, creditors will have recourse even if a decedent’s estate does not have sufficient funds to pay the debt.

If a decedent had a secured loan that was active at the time of their death, creditors can usually request for the decedent’s estate to repay the debt or allow the beneficiaries who stand to inherit the asset to continue making payments on it. The creditor could also repossess the asset, foreclose on it or force its sale, especially in instances where the decedent’s estate is insolvent.

Enforcing Unsecured Loans

If the decedent had an active unsecured loan at the time of their death, creditors can enter a creditor’s claim against the decedent’s estate to try to secure repayment.

It is especially important for creditors who issue unsecured loans to understand the creditor claims process, since their loan had not been backed by collateral and entering a creditor’s claim is their only recourse. Because of strict deadlines, creditors owed repayment on an unsecured loan should act quickly and make sure to follow the creditor’s claim protocol to a tee. 

When there is uncertainty about the process for filing a creditor’s claim, it is important for creditors to seek the help of a probate firm as soon as possible; one missed deadline or error on part of a creditor with an unsecured loan could lead to a rejected claim.

Enforcing Unmatured Contingent Claims

While unmatured creditor claims will generally come due at some point in the future, contingent creditor claims are hypothetical, meaning that it won’t be known until after the occurrence of a predetermined future event, which could or could not happen, whether the debt will come due or in what amount the debt will be. Nevertheless, if a decedent had an unmatured or contingent debt, and the relevant creditors hope to eventually collect repayment of that debt, they should abide by the same deadlines and rules as other types of creditors.

The primary difference between unmatured or contingent creditor claims and other types of creditor claims is in how they are handled by the court. Depending on the specifics of the claim, the judge could order the executor/administrator to open a bank account containing the amount owed to the creditor in case the debt comes due in the future, or the judge could pass the liability on to estate beneficiaries by releasing their inheritances but making them put down a security deposit for possible repayment of debt in the future.

A probate firm can help unmatured and contingent creditors enforce their creditor rights and navigate the complexities associated with their type of creditor claim.

How to Enter a Creditor’s Claim

For the best chance at obtaining repayment, creditors should be sure to enter creditor claims according to the rules outlined in the California Probate Code and Code of Civil Procedure. When they stray from California law, creditors’ chances of repayment and/or obtaining a judgment are significantly decreased.

Creditors Shouldn’t Delay in Filing Claims

Deadlines for creditor claims have been enacted by the courts to ensure estates can be administered speedily. Creditor claims will generally be rejected unless there is a valid reason for submitting a late claim. For a creditor’s claim to be considered, it must be submitted in a timely manner according to the state’s nonclaim statutes – statutes relating to the time period in which creditors are permitted to enter creditor claims.

In California, the deadlines for entering creditor claims are within the later of:


  • 60 days after creditors have received notification about the debtor’s death; or
  • 4 months after letters of administration are issued


It is important to note that 1) it is not necessary for creditors to receive notification of the debtor’s death in order for them to file a creditor’s claim and 2) creditors should abide by deadlines because even if they are not properly notified, they could be held to deadlines by the court.

Something else creditors should keep in mind is that creditor’s claims must be entered within one year following the debtor’s death at the absolute latest, or they will be forever barred. 

It is common for executors/administrators and the family members of decedents to wait until after the deadline to start probate in an effort to thwart creditors from pursuing claims against the estate. Creditors should be proactive by keeping tabs on debtors from the time the debt is opened. This way, if the debtor dies, the creditor will know to enter a creditor’s claim as soon as possible.

Creditor Claims Should Be Entered in Writing

It is crucial for creditors to submit their claims in writing.

Per California law, creditor claims should be signed by the creditor and include the following:


  • Name and address of claimant
  • Facts and circumstances surrounding the claim
  • Amount of claim
  • Due dates

Probated Assets vs. Non-Probated Assets

Probated assets are assets that pass through probate (i.e., the court process of administering a person’s estate after their death). They include any assets included on the decedent’s will, as well as any assets that are not held by a trust or assigned to designated beneficiaries.

Non-probated assets are assets that do not pass through probate and transfer directly to beneficiaries. They include trust assets, assets with deed transfers, assets held under joint tenancy, and assets with beneficiary designations, such as life insurance policies, and bank and retirement accounts with named payable-on-death beneficiaries.

Creditors must always take care to pursue a decedent-debtor’s probated assets first. If those assets are not sufficient in paying off the debt, the creditor may be able to pursue the decedent’s non-probated assets, but with some exceptions.

Creditor Claim Outcomes

After a creditor claim has been filed, the personal representative of the estate – the executor or administrator – can either:

  • Approve the claim; or
  • Deny the claim; or
  • Approve the claim in part or reject the claim in part

If a creditor has not received a response from the personal representative of the debtor’s estate within 30 days of filing the claim, they have the authority to assume it has been rejected. 

If a creditor’s claim is rejected in whole or in part, the creditor must file a lawsuit to enforce their claim within 90 days of learning about the rejected claim in order to try to obtain a judgment against the decedent’s estate. As previously mentioned, if a judgment is ultimately entered, the estate will have to pay, and the creditor will have the ability to use the courts to enforce their rights.

Creditor’s Obligation to File a Notice of Pendency

When the executor or administrator of an estate rejects a creditor’s claim, the creditor will generally try to enforce their claim by filing a lawsuit against the estate with a separate court (e.g., civil court). To protect their claim and notify the probate court of the ongoing case involving the estate, the creditor must file a Notice of Pendency of Action with the probate court. This way, if the executor or administrator requests permission from the probate court to close the estate and distribute its assets, the court will know not to grant it on account of the litigation pending against it. 

Reach Out to Keystone Law Group for Questions About a Creditor’s Claim

If you need help understanding the differences in procedure for enforcing a judgment against a deceased debtor’s estate and a debtor who is still living, call Keystone Law Group today. As a law firm who frequently represents creditors, we are qualified to answer any questions you may have.