I would strongly urge you to contact an attorney in your jurisdiction to assist you as there are several pieces to this puzzle which cannot be ascertained online. As just one example, did your grandfather's trust continue for the lifetime of your father or was it supposed to be distributed to him immediately? Having an attorney involved could help you determine the creditors' rights and, perhaps, preserve the assets in your grandfather's trust for you and your other family members. Good luck to you.
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I agree with Attorney Pankowski. You need to review all of your facts with a probate attorney. It may be possible to shelter ALL of your father's and grandfather's assets from creditors. In every State that I know of, administrative costs take precedence over creditor claims. There are also often exemptions and allowances that would permit you to shelter even more. There is not that much left in your father's estate that you would need to cover, so it makes sense to look into this further.
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Agree with the other two attorneys. There is information missing that could be crucial to a response. Recommend you contact an experienced Trust Administration attorney.
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I agree with all the other attorneys in saying we need more information. I had a similar situation with a client in Richmond. A lot of debts and very little in the way of assets. The probate code provides a strict order for payment of expenses and creditors. The benefit of a court administered probate is that it forecloses all claims against the estate so you never have to worry about whether a creditor can come out of the woodwork and try to attach to your beneficial interest.