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7 Types of DebtThere are 7 types of debt that may arise during an Estate Administration. Unfortunately for many of us, debt is an everyday reality. When a person dies, these debts may still need to be resolved. The personal representative of an estate is tasked with the responsibility of addressing these debts during the estate administration. It is important to understand which debts need to be paid and in what order. To do so, the personal representative must be aware of what debts exist.

7 Types of Debt That May Be Involved in an Estate Administration

What type of debts are commonly involved in an estate administration? The following are seven examples:

  1. Credit card debt
  2. Student loan debt
  3. Mortgage loans
  4. Personal loans
  5. Business loans
  6. Unpaid federal, state, and local taxes
  7. Bills for services provided

Since every estate is unique, there could be many other types of debts that need to be addressed after your loved one dies and the administration of his or her affairs begins. How these debts should be handled depends on various factors. Some debts may not need to be paid at all, as the obligations of the decedent end upon his or her death. Other types of debt must be paid from the assets within the estate. Of these debts, there are specific priority rules that must be followed during the estate administration process. The priority of payment of debts may also be dictated in the decedent’s will and trust. Generally, the relatives of a decedent are not responsible for the debts of an estate.

Know the Types of Debt that May Arise During an Estate Administration. Deciding how to handle the debts of an estate requires the assistance of a knowledgeable legal professional. We can provide you with the help you need. We encourage you to contact us today at 714-282-7488.

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Due to the CoVid19 virus California has issued a Stay-at-Home order. We understand how important the health and safety of our clients, and our staff is. We are complying with this order by continuing to work from our homes. While we are not in the office, we are still here to answer your questions, conducting consultations for review, and initial appointments by phone and email during normal business hours. We know that in this time, more than ever, it is important to have peace of mind about your estate planning. We are here to help you through this. Call our office number or email us and we will respond as quickly as possible.