Estate Laws for Insolvent Estates in Georgia

By Jennifer Williams

Georgia law considers a decedent's estate insolvent when the decedent dies without enough money to pay all of his debts, including taxes. As in bankruptcy, Georgia law exempts some assets from creditor attachment. In other words, some assets are not available to creditors to satisfy an estate's debt. Georgia law establishes the order in which debts must be paid from estate assets less exemptions. Each debt must be paid in full before the next in line may be paid. If there are not enough assets left to pay all of the debts remaining, those creditors do not receive payment.

Step 1

Calculate the amount of the estate's value exempt from creditor attachment-- that is, the amount unavailable to creditors to pay their claims. Georgia allows the value of one year's support for the deceased's family. This amount comes off the top of the estate's value and cannot be accessed by creditors to satisfy their claims.

Step 2

Order the creditor claims requiring payment according to the hierarchy of creditor payment established by Georgia law. The deceased's funeral expenses must be paid first. Second in line for payment are the expenses for estate administration, including compensation for the personal representative, court fees and costs, and fees for legal and accounting advice. Fourth and fifth in line for payment are the deceased's final illness medical expenses, and state and federal taxes. Sixth are judgments, liens and secured loans. Any other debts not covered in the previous six categories are paid last.

Get a free, confidential bankruptcy evaluation. Learn More

Step 3

Identify co-signed and guaranteed debts that can't be paid from estate assets. If the estate runs out of assets before a co-signed or guaranteed debt is paid, the co-signor or guarantor is responsible for payment. Contact this person to inform him that he must pay the debt because the deceased's estate does not have the money.

Step 4

Close the estate by filing a Petition for Discharge with the probate court, after all exemptions and debts are paid or the estate runs out of money, and all accountings and reports required by the Georgia probate court are filed. Send notice of the petition to all beneficiaries, heirs and unpaid creditors. When the court grants the petition, the personal representative is discharged from that position and any further liability to the estate, and the estate is closed. Once the estate is closed, unpaid creditors are prevented from further collection efforts against the estate.

Get a free, confidential bankruptcy evaluation. Learn More
State of Georgia Guidelines to Show That a Personal Estate Is Insolvent
 

References

Related articles

Responsibilities of an Executor of Estate in Nashville, Tennessee

The probate division of the Seventh Circuit Court oversees probate of estates in Nashville, Tennessee. The executor of an estate must report in periodically to this court. Normally, a decedent names an executor in his will: This is the person he wants to settle his estate, paying his debts and apportioning his remaining assets among his beneficiaries. When a decedent does not leave a will, his estate must still pass through probate, but the probate division appoints an executor.

California Debt Collection Laws for Deceased Persons

When a resident of California dies, an estate remains -- the property legally belonging to that individual. The estate must typically go through probate before a personal representative can distribute assets to heirs and beneficiaries. The representative must also handle the decedent's debts and deal with creditors who have claims against the estate.

Time Limitations in California State Inheritance Laws

Many deadlines follow a person's death as his estate is being probated in California. Probate is the process by which courts make sure that a deceased person's debts are paid and property distributed to his heirs. Deadlines in this process must be satisfied in order for the process to proceed smoothly. Probate only applies if the combined value of the decedent's real and personal property are greater than $150,000 at the time of death. If the estate's assets are less than this, these deadlines are irrelevant.

Related articles

What Do I Do If My Father's Estate Doesn't Have Enough Money to Pay Taxes & Legal Fees?

The death of a parent or other loved one is a stressful and sad enough time without adding worries about settling his ...

Who Gets Paid First Out of a Deceased's Estate?

Probate is the process of settling a decedent's estate under court supervision. State law may establish an informal ...

How to Write a Letter Requesting the Payment of a Deceased's Debt

If someone died owing you money, you may request payment by writing a letter to the personal representative of the ...

What is the New Jersey Statute of Limitations for Claims Against a Decedent's Estate?

Under New Jersey law, creditors have only a limited number of months to make a claim against an estate. If a claim is ...

Browse by category
Ready to Begin? GET STARTED