Skip to Content

We are a Veteran Owned Business, providing 20% discounts for Veterans, First Responders, Elementary and High School teachers. Please contact us to set up a phone or Zoom meeting. Taking care of you and your family, It's What We Do!

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. 

What Our clients are saying

Klenk Law Logo


Peter has done our family's trust and estate work since our children were born. He is not only extremely knowledgeable and honest but makes sure that our arrangements remain current with the changing legal landscape. I would give him my highest recommendation as a professional in his field.

Klenk Law Logo

Dylan Small

Peter provided outstanding advice and preparation of a will and trusts.

Klenk Law Logo

Brian M.

Peter explained a complex subject very clearly, helped us to decide the best approach to managing our estate and then made it very easy for us to execute the required documents. He will be a valuable resource for years to come and clearly has a great understanding of estate law that will lead to innovative solutions for us. I would unhesitatingly recommend him for estate planning.

Klenk Law Logo

Qiana Wright

Great friendly staff

Klenk Law Logo

Chris Curcio

Fantastic customer service. Very personable and most importantly they provide great explanations of what is required based on your individual needs. Highly recommend Klenk Law for anyone that needs to create a will and estate documents.

Let us put our expertise to work for you.

Free consultation within 24 hours.