I've been working on getting a relative's estate in order, but I've discovered a real Catch-22 situation. The property has to be sold to pay the debts. I did a judgment search on my own at the County Clerk's office and discovered 2 judgments which added together exceed the value of the estate, this doesn't include outstanding medical and funeral bills. The estate attorney says the property can't be sold until the judgments are settled, but there's no money. What should be done in this situation?
Administrative expenses of the estate should take precedence over the judgments, but you may need to get probate court authority to sell the property and divide the proceeds. The judgment creditors would likely get a pro rata portion of the proceeds.
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Mr. Frederick is correct. The estates administrative expenses and funeral expenses are generally priority claims against the estate. You would need a court order to sell the property, then the other creditors including the judgment creditors would be able to make claims for their balances.
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I'm wondering if your attorney didn't address this fully for you. Also, were the judgments against the property or the decedent?
Ask your attorney about compromising the amount so you can offer the creditors something, but still salvage some money for the estate beyond merely paying c reditors.
Bob Brenna Jr
Brenna Brenna & Boyce PLLC
Rochester, New York
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