DEATH & DEBT
"What happens when a person who owes you money dies? Can you recover from what they own, or does it go to their heirs?"
Well, it primarily depends on what they own and how title is held. It can be very complex and so I always recommend speaking with an attorney regarding your matter, but here are some basic guidelines to take note of first:
1. If you wait longer than a year from their death to do anything about it, then you, more than likely, have lost your ability to collect.
2. You may not be able to collect from assets that have a beneficiary designated on them, this includes most life insurance policies, IRAs, joint banking accounts, or pay on death accounts.
3. If they own a home solely in their name, then you may be able to collect by filing a simple document with the Court called a creditor's claim.
A lot goes into deciding whether or not it may be worth pursuing a claim against a deceased individual to get paid prior to their assets being distributed to heirs. Often times, it can become costly should you choose to pursue but sometimes it can be simple and inexpensive depending on your circumstances. Either way, due to court mandated time limits, getting early legal help to learn about your options is important.
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