If the executor/beneficiaries are not willing to loan the estate money, how do bills get paid until the property is sold?
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If the executor/beneficiaries are not willing to loan the estate money, how do bills get paid until the property is sold?
The estate in question consists of a house and considerable debts that are owed. Both the executor and beneficiary has already spent thousands of their personal money to cover costs for the estate. The estate’s cash/liquid assets will be depleted soon. How do the bills on the property get paid/handled once that money is gone if the beneficiary and executor won’t loan the estate anymore money? Can the estate file for bankruptcy?
Asked on August 16, 2011 Pennsylvania
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If there is not enough liquid assets to cover the estate's debts where the main asset is a house, one way of obtaining monies to cover the estate's obligations is for the executor to petition the court sooner than later for an order to sell the home as soon as possible by placing it on the market or, petition the court to use the home as security to obtain a loan for the estate and hope that the court grants the request.
Another option is to have the estate's lawyer work out an arrangement with the creditors to hold off on their payment demands until the home is sold. Most creditors faced with a good likelihood of being paid would be more than willing to wait until the home is sold for payment.
An estate of an individual cannot file for bankruptcy. If there are not enough assets to pay all the crediots in full, they take a percentage of the amount owed them from the estate's net amount after administration expenses are paid pursuant to a court order.
Good question.
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