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Ely, Counselor at Law
Category: Estate Law
Satisfied Customers: 99430
Experience:  Fully licensed attorney in Texas in private practice.
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My father recently (March) passed away in Texas. He did not

Customer Question

My father recently (March) passed away in Texas. He did not have a will, transfer on death deed, nothing... At passing, he had a home with a mortgage balance of $70,000. Additionally, he had other debt totaling $47,000 (credit card ~23,000, auto ~6,000 & bank installment loans ~18,000). I know the auto loan is secured by the vehicle but I don't know whether the installment loans are secured. My father had no other assets other than misc. furnishings.
I'm guessing he had ~$30,000 equity in the house. With that assumption, if the proceeds from the sale (SAY 30k) go to creditors; that would wipe out the proceeds. I don't want to put good money into the house prepping it for sale with no way to recover the investment.
So I guess my question is; if I were to sell the house; would I have to use the proceeds from the sale to pay off the unsecured creditors?
Submitted: 5 months ago.
Category: Estate Law
Expert:  Ely replied 5 months ago.
Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms. I am sorry to hear about this situation. The short answer to your question is yes. All creditors that hold valid claims have to be paid out prior to the beneficiaries taking whatever is left. NOTE that there is no mandate to notify unsecured creditors aside from the general publication. The Executor/Administrator of the estate also has the option to send notice to an unsecured creditor to assert their claim in probate. If they do not within 120 days after the date on which notice is received, the unsecured creditor loses their right to assert their claim. This is called a PERMISSIVE NOTICE. This is optional. See HERE, Sec. 308.054. If the unsecured creditors assert their claim in time, then they have to be paid out before the proceeds. I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how experts get credit for our time. Rating my answer the bottom two faces/stars (or failing to submit the rating) does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.
Customer: replied 5 months ago.
I have not formally taken the role of Administrator however, I plan to take the lead on cleaning things up. That being said; if I provide notice to unsecured creditors so they may assert their claim; where do I tell them to mail their claim to; directly to me?
Expert:  Ely replied 5 months ago.
The notice is provided in a formal proceeding for probate/small estate administration, so only an Executor/Administrator (appointed formally) should be sending said notice.
The claim is to be sent to the Executor/Administrator - so yes - to you via your address (or your attorney's).
Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.

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