Legal Question in Credit and Debt Law in Maryland

I have an interesting problem of sorts. Dad passed away 3/09 and the estate was small and considered insolvent. There were 9 creditors, but practically nothing to pay them. 3 years later i am notified by an insurance company in Texas that dad's estate has a large distribution coming it's way. Dad's sister(deceased) had an annuity with dad designated as the sole beneficiary. This insurance company let the annuity run out to 15 years before they contacted me, by the way! So now I have this large check, made payable to the estate of dad, the small estate is closed, 3 years and a month have gone by, the Reg.of Wills makes me reopen and change closed estate to regular, contact all the old creditors with a new notice to creditors (but, with all the original dates from 2009,etc.) So I contact the creditors by certified mail( incl. a letter as to why, now 3 years later I'm writing them) and have waited out the 6 months. I haven't heard a word from them. I received the 9, green, return receipt cards, but no correspondence and not one phone call. 5 of them did send me cancellation of debt information over the years and one creditor withdrew their claim. 3 other creditors never did anything. Personally, I think they are aware the statute of limitations has run, and they don't have much of a chance of getting paid. The problem is the Reg.of Wills. They are pushing for some kind of written statement from these creditors. I've told them the facts; they got their notice (and letter from me), had their 6 months and have done absolutely nothing. I'm going downtown soon to file an accounting and I don't want any more trouble out of them. I'm the only legatee, everything else is done, my brother got notified ( not included in the will),etc. I just want to pay the estate fees and the state of Maryland taxes and close it. Question: why is the Register of Wills so stuck on current statements from these creditors? They ARE NOT going to do me any favors. If forced to I'll write them one more time, but that's it. Hasn't the ROW ever heard of the statute of limitations on credit card debt. It's been 3 years and 9 months now!!! ANY ideas would be helpful. Thank you very much. M.S.


Asked on 12/25/12, 9:46 pm

1 Answer from Attorneys
Cedulie Laumann Arden Law Firm, LLC

That is an interesting problem. If any creditors filed a valid claim form within the original time frame, then any money going through the estate would generally need to pay out those creditors before going to the heirs. It sounds as though the Register of Wills is taking that position.

The law says that creditor claims of an estate are time barred if they do not file. However, from your scenario it sounds as though some creditors DID timely file claims when notified of the death (though they may not have filed twice). I'm not aware of any law saying that the estate's creditors waive any rights to later discovered assets unless they re-assert their claim. (though it is an unusual problem and I have not researched that precise question).

Unfortunately if the creditor had a valid claim against the estate and filed it, the Personal Representative may have issues if the estate assets are disbursed without paying those creditors, even if the creditors are not responding to recent letters. In a worst case scenario disbursing assets could be attacked as a fraudulent conveyance.

In this scenario you may well wish to have an attorney assist with the estate administration. In some cases a creditor will negotiate to resolve its claim for less than the stated amount.

While I hope the general information helps, it does not substitute for legal advice nor create any kind of attorney/client relationship between this firm and the persons posting the question.

Read more
Answered on 1/14/13, 9:42 am


Related Questions & Answers

More Credit, Debt and Collections Law questions and answers in Maryland