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Settling Creditor Claims Attorneys Allentown, PA Estate Litigation Appeals Lawyer Philadelphia, PA

When a person dies, all debts must be settled. This process is part of executing an estate and may require an Allentown, PA attorney for settling creditor claims. 

Understanding the Process of Settling Debt in an Estate

As the executor of an estate, you will have many responsibilities including the need to resolve all debts. This is true regardless of whether or not a will existed. The difference between a person dying away testate (with a will) or intestate (without a will) primarily comes down to whether the court decides who will handle the estates’ affairs. When there is no will, the court will name a personal representative, or executor. In any case, this person assumes a fiduciary role to the beneficiaries of the estate. It will be up to them to act within the financial interests of the estate. In order to do this, a strict process should be followed. 

The Probate Process

Apart from filing documents with the probate court, the executor will be responsible to notify all service providers and creditors who may have an interest in the estate. As a settling creditor claims attorney in Allentown, PA might tell you, this step allows anyone with an interest to file a claim against the estate within the set period of time. The executor must also notify beneficiaries; afterwhich, an inventory of the estate must take place. The inventory will give the executor an idea of the estate’s value, and from this, debt can be settled. Keep in mind, some assets will not be part of the estate. These might include insurance policies, 401(k)s, and brokerage accounts. 

Once this part of the process has begun, our Philadelphia probate attorneys might advise the executor in examining whether there are any claims on the estates’ secured debt. If there is, these must be settled. Only once all debts and taxes have been paid will the estate be distributed to beneficiaries. 

Should no will exist, the intestate laws of Pennsylvania will apply. There are a number of rules relating to dying without a will in Pennsylvania. In general, if the decedent is survived by a spouse, the spouse will receive $30,000, plus a portion of the estate. Our Allentown, PA settling creditor claims attorneys can discuss the specifics of these laws with you during a consultation. 

What if the Estate Cannot Pay All Debts?

When an estate does not meet the monetary obligations of creditors, the IRS, and claims from beneficiaries, the estate is said to be insolvent. It will then be subjected to abatement statutes. Generally, this means the debts are to be paid in the following order:

  • Reasonable funeral and burial costs
  • Estate administration costs
  • Federal taxes and state taxes
  • Reasonable medical expenses of the last illness/ailment
  • Any judgements ordered against the decedent
  • All remaining claims

As soon as the estate’s assets have been depleted, remaining debts are discharged. Exceptions to this might include when:

  • Joint account holders may be liable for any remaining debts owed. 
  • Co-signers may be liable for the remaining balance. 
  • Community property states might leave the living spouse responsible for debts acquired during the marriage. 

In the event an estate has debts that exceed its assets, or any debts that give rise to questions, a settling creditor claims attorney in Allentown, PA should be consulted for advice. Call Klenk Law today. 

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Dustin Ward

Jackie was fantastic! She helped prepare our will, her professionalism and organization was top notch! We highly recommend Jackie and Klenk Law.

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Daniella was fantastically wonderful. A joy to be around and filled our conversations with so much educational knowledge. I’ve learned so much from her about being a great person and I can’t wait to work with her again

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Javier Suarez

The whole process of ensuring that I can provide my mother her wishes upon her death, was made easy by working with the team at Klenk Law. I received my documents quickly and properly.

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Christian Milazzo

This law firm was super helpful with answering all my questions! Huge props specifically to Riley for their enormous assist with helping me get where I needed to go. They were fantastic!!!

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Lu Han

I have worked with three different attorneys and law firms over the years, and I can confidently say that attorney Peter Klenk stands out as the most knowledgeable. He created the most thorough wills and trust documents I've ever had. Mr. Klenk took the time to gather all the necessary details about my current situation and goals. As a result, he put together comprehensive documents that I believe will effectively protect my assets and ensure my children's inheritance is secure.
What truly sets Mr. Klenk apart is his patience and dedication to understanding my questions. He provided detailed explanations that made complex legal concepts much easier to grasp. His team's communication and scheduling were equally impressive, making the entire process smooth and stress-free.
Thank you, Mr. Klenk, and your fantastic team, for your exceptional service!

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