Life insurance is paid to the beneficiary outside one's will.
If the deceased had wanted to change the beneficiary, she should have. However, there's no way to be sure it was not done this way intentionally. Perhaps knowing that person X was to receive the proceeds of insurance, X was disinherited so as to "even out" the distribution? (Or at least the argument goes).
Many an ex-spouse has benefitted by such oversights.
Are you a beneficiary of the estate?
Does the estate have assets other than the house?
If you're not a stranger to the estate, perhaps you can help negotiate a settlement with the 3rd party judgment creditor that will enable you to take the house free of that lien. You definitely need to sit with an attorney right away before you do anything.
I don't see any cause of action here. You're now on notice that you have a madman for a landlord and you've already suggested (rightfully so) the hell with your deposit. By the way, your deposit must be returned after you leave the premises provided there's no damage. Get out of there ASAP.
If you're both still "borrowers" you'e both probably still jointly and severally liable for the debt. The fact that you had exclusive possession probably also means you were responsible for the carrying costs. Chances are, if yours is like many I have seen, at the sale, you would be entitled to a credit for the principal payments you made from the date of the order through the date of the sale, but you would have been solely responsible for taxes, interest, water, utilities, etc. The fact...
Are you a beneficiary?
While you await the appointment of a new executor, If you can afford to do so, pay them yourself - you will be reimbursed. If not, find some other beneficiary who can afford to temporarily lay-out the money.
If you are a beneficiary and not the Executor, it is true the attorney does not represent you. If you want representation, you need to retain your own counsel. Have you spoken to the Executor to see what he thinks the timeframe is? He may be speaking with his attorney regularly.
You need a Lawyer for this. Hopefully, you have an attorney representing you in the purchase. Too many things can go wrong, and too much to list here.
Creating a landlord /tenant relationship with the prior owner is not a good idea.
It may also be a violation of your mortgage agreement for you to not live in the house.. Your lawyer can better guide you.
If your judgment (and necessarily your petition) is silent on the issue of damage to the unit, you have an uphill battle. As has been said, "costs" refers to your filing fees. Did you have an attorney representing you?
Based on the relatively small amount you are talking about, you might consider small claims court, but be aware that to prove your case, you will need to establish not only that you spent the $250, but that the apartment was not in that state when the tenant first got...