Can a creditor make a claim on an estate if the foreclosure of a property is complete?

UPDATED: Sep 3, 2011

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Can a creditor make a claim on an estate if the foreclosure of a property is complete?

If a person dies and the forclosure of their house was already in progress, not yet complete (before the death), can that creditor still make claim on the estate? The house in question is not worth what is owed. The Will for this person has not yet been found but we know there is one.

Asked on September 3, 2011 under Estate Planning, Texas


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

In the probate process, one of the reasons for it is to allow creditors to make a claim to the estate's representative for unpaid amounts owed. Whether or not the lender who has a secured interest in the home that is subject to foreclosure can claim a deficiency for any amount owed on the home depends upon whether or not the loan is purchase money (original loan for the home's purchase) and whether or not Texas has anti-deficiency statutes precluding a deficiency judgment on a purchase money loan.

If the loan is not purchase money and the home sells for less than the amount owed at a foreclosure than what is owed on the loan, then the creditor most likely can claim a deficiency owed and make a creditor's claim to the estate.

I suggest that you retain a wills and trust attorney experienced in real estate law to ascertain the status of the loan for the property that will be foreclosed upon to see if it is purchase money or not.

Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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