When someone passes away and their estate enters probate, creditors may have the right to file claims to recover debts owed by the deceased. But what exactly happens when a claim is filed against an estate? At Katzner Law Group, we often help executors, beneficiaries, and creditors understand their rights and responsibilities during this process.
When a claim is filed against an estate, the personal representative or executor reviews it, deciding whether to approve or dispute it. If approved, the claim is paid from the estate’s assets. If disputed, the creditor can take the matter to court for a decision. If the estate lacks sufficient assets to pay all debts (an insolvent estate), claims are paid according to a specific legal priority, with some lower-priority debts potentially not being paid at all, and heirs possibly receiving nothing.
This article breaks down what you need to know about estate claims, the process creditors must follow, and how executors should handle them.
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What Does It Mean to File a Claim Against an Estate?
Filing a claim against a probated estate is the formal legal process by which a creditor notifies the court and the estate’s personal representative that the deceased person owed them a debt.
This claim can involve:
- Credit card debt
- Medical bills
- Personal loans
- Business obligations
- Court judgments
- Unpaid rent or leases
It’s important to note that these claims can only be made within a specific time frame after the probate case is opened, known as the creditor claim period.
Filing a Claim Against a Probated Estate in New York
Filing a claim against a probated estate is the legal process by which a creditor seeks repayment for a debt owed by someone who has passed away. In New York, this process is governed by the Surrogate’s Court Procedure Act (SCPA) and must follow strict timelines and documentation requirements.
In New York, any person or business with a valid claim against the estate may file. This includes creditors such as credit card companies, hospitals, landlords, service providers, or government agencies seeking reimbursement for unpaid taxes or Medicaid. The deadline for filing a claim is generally seven months from the date Letters Testamentary or Letters of Administration are first issued by the Surrogate’s Court, as outlined in SCPA § 1802. This deadline is not extended by the appointment of subsequent fiduciaries.
When filing a claim, the creditor must submit the claim in writing to the estate’s executor or personal representative. The claim should include:
- The name of the deceased
- A statement of the facts upon which the claim is based
- The nature and amount of the debt
- Supporting documentation, such as bills, contracts, promissory notes, or court judgments
- An affidavit stating that the amount claimed is justly due and that all known payments have been credited (if requested by the fiduciary), per SCPA § 1803
Once a claim is properly presented, the executor has 90 days to either accept or reject it. If the claim is rejected, the executor must provide written notice stating the reason for rejection. If the executor fails to respond within 90 days, the claim is deemed rejected by default.
If the claim is rejected or no action is taken, the creditor may petition the Surrogate’s Court under SCPA § 1809 to have the court determine whether the claim is valid and should be paid from estate assets.
Common Questions About Filing a Claim in New York Probate (People Also Ask)
How long do you have to claim an estate after death in New York?
In New York, creditors generally have seven months from the date Letters Testamentary or Letters of Administration are issued by the Surrogate’s Court to file a claim. Claims filed later are not automatically barred, but executors who have already distributed assets in good faith are protected from personal liability.
What is the “3-year rule” for a deceased estate in New York?
The “3-year rule” applies in both federal and New York estate tax contexts. In New York, gifts made within three years of death (on or after April 1, 2014) are added back into the estate for tax purposes. Annual exclusion gifts—up to $19,000 per recipient in 2025—are exempt.
How long is an executor liable for debts in New York?
An executor is generally protected from personal liability once the seven-month claim period has expired, provided they acted in good faith. However, liability may still apply if they had knowledge of debts, paid claims out of order, or acted in bad faith.
Is there a time limit to settle an estate in New York?
There is no fixed statutory deadline, but estates must remain open at least seven months to allow creditor claims. Most uncomplicated estates are settled within 8 to 18 months. Complex cases (tax audits, disputes, real estate) may take longer.
Who Can File a Claim Against a Deceased Person’s Estate?
Creditors may include:
- Banks and Credit Card Companies
- Medical Providers and Hospitals
- Business Partners or Vendors
- Landlords (for unpaid rent)
- Individuals (personal loans, services rendered, etc.)
- Government Agencies (for taxes or Medicaid recovery)
Important Note:
Heirs or beneficiaries cannot file a claim as creditors unless they are owed money by the deceased apart from their inheritance.
The Legal Process of Filing a Claim During Probate
The probate process for claims is governed by state law, and in New York, strict deadlines apply. Here’s how the process works:
1. Opening Probate and Notifying Creditors
- The executor or personal representative is appointed by the Surrogate’s Court.
- They are responsible for notifying known creditors and publishing a notice to unknown creditors.
- According to the New York Surrogate’s Court Procedure Act (SCPA), creditors typically have seven months from the executor’s appointment to file claims.
2. Submitting a Claim
Creditors must submit their claim in writing and include:
- The nature of the debt
- Amount owed
- Supporting documentation (invoices, contracts, etc.)
- Contact information for follow-up
3. Review by Executor or Personal Representative
The executor reviews each claim and must decide whether to:
- Approve the claim (and arrange for payment from estate assets)
- Reject or dispute the claim (based on validity or insufficient documentation)
4. Disputed Claims Go to Court
If the claim is denied, the creditor has the right to file a lawsuit against the estate to recover the debt. The court will decide whether the claim is valid and enforceable.
What Happens After a Claim Is Filed Against the Estate?
The outcome depends on several factors, including the value of the estate, the number and type of claims, and whether the estate is solvent.
If the Claim Is Approved:
- The debt is paid using estate assets.
- Claims are typically paid before any distributions to heirs.
If the Claim Is Disputed:
- The creditor may negotiate a settlement.
- The creditor may sue the estate for the amount owed.
If the Estate Is Insolvent:
An insolvent estate doesn’t have enough assets to pay all debts. In this case, creditors are paid based on a legal priority list.
Priority of Claims in New York:
According to the New York SCPA and Estates, Powers and Trusts Law (EPTL), the following priority is applied:
- Administrative expenses (court costs, executor fees)
- Funeral and burial expenses
- Federal and state taxes
- Medical expenses related to final illness
- Secured creditors (e.g., mortgages)
- Unsecured creditors (credit cards, personal loans)
If there isn’t enough to pay everyone, lower-priority creditors may receive little or nothing, and heirs may receive no inheritance.
Evidence Needed to Support a Creditor’s Claim
To strengthen a claim against an estate, a creditor should include:
- Signed contracts or agreements
- Account statements or invoices
- Promissory notes
- Loan documentation
- Medical billing summaries
- Judgment orders or court documents (if applicable)
The more documentation a creditor can provide, the greater the chance their claim will be accepted.
Can a Creditor Take Assets From the Estate?
Creditors cannot take assets on their own. Only the executor or court can authorize the payment of debts from estate property. However, creditors can request a court order if their claim is improperly denied or ignored.
How Executors Should Respond to Claims
Executors have a fiduciary duty to act in the best interests of the estate and its creditors.
Executor Responsibilities:
- Respond to claims in a timely manner
- Communicate with creditors
- Maintain accurate records of debts and payments
- Ensure lawful payment of debts in priority order
Failing to follow proper procedure could make the executor personally liable for unpaid debts.
Can Heirs Be Held Responsible for Estate Debts?
Generally, no. Heirs are not responsible for paying the deceased person’s debts unless:
- They were a co-signer or joint account holder
- They received non-probate assets fraudulently or improperly
- The estate was mishandled, and they are also serving as executor
How Long Do Creditors Have to File a Claim?
In New York, creditors generally have seven months from the date the executor is officially appointed to file their claim. After that, the executor may distribute the estate’s remaining assets to heirs without liability for unknown claims.
Learn more at NYCourts.gov
When Should You Seek Legal Help?
Estate claims can become contentious, especially if the estate is insolvent or a claim is disputed. Whether you’re an executor handling claims or a creditor seeking payment, professional legal guidance ensures your rights are protected.
Final Thoughts
When a claim is filed against a probated estate, it triggers a formal process that protects both creditors and beneficiaries. From verifying the claim’s validity to distributing estate assets, the executor must follow a strict legal framework. Many families also look for strategies on related issues, such as How to Avoid Probate in San Diego, to simplify the process for their loved ones. Creditors who submit complete and timely documentation are more likely to succeed, but if the estate lacks funds, not all claims may be honored.
Need Help With an Estate Claim? Contact Katzner Law Group Today
At Katzner Law Group, we guide executors and beneficiaries through the complexities of probate law, including the proper handling of estate debts. If you need help managing or disputing a claim—or protecting your inheritance—our team is ready to support you.
Visit our Contact Page or call us at 855-528-9637 to schedule a consultation today.
