Can Creditors Harass Family After Death

Emily received a collection call just three weeks after her husband, Curtis, passed away—demanding $60,000 on a credit card debt Curtis had accumulated during their marriage, and threatening to garnish her wages. She was understandably terrified, believing she was personally liable simply by being the spouse. The reality, as I’ve explained to countless grieving families over my 35+ years practicing as both an Estate Planning Attorney and CPA in Escondido, California, is far more nuanced, and often less alarming than these initial threats suggest. Understanding the rules surrounding debt and creditor claims after death is critical to protecting your assets and peace of mind.

What Happens to Debt When Someone Dies?

When a person dies, their debts do not simply disappear. They become a claim against the deceased’s estate, not generally against the surviving spouse or family. The estate is essentially a separate legal entity, responsible for settling the deceased’s obligations. This process begins with probate, the court-supervised administration of the estate, but it’s important to remember that not all estates require formal probate. Smaller estates, for example, can often be handled through simplified procedures. In California, as of April 1, 2025, those procedures apply to estates with assets totaling $208,850 or less, as outlined in Probate Code § 13100.

How Do Creditors Make Claims Against an Estate?

Creditors don’t simply have the right to demand payment immediately after someone dies. They must follow California’s formal claims system, as dictated by Probate Code §§ 9000–9399. This typically involves filing a formal creditor’s claim with the probate court within a specific timeframe after the probate proceedings are opened. The executor or administrator of the estate then reviews these claims, and may dispute them if they are invalid or inaccurate. Failing to properly respond to creditor claims can have severe consequences, potentially resulting in personal liability for the estate’s fiduciaries.

What Debts are Paid First?

California has a mandatory payment order that dictates the priority of debts. Certain debts, like funeral expenses and administrator fees, take precedence over others, such as credit card debt or personal loans. Probate Code § 11420 outlines this precise order. For example, secured debts – those backed by collateral, like a mortgage – are typically paid before unsecured debts. The order can be complex, and understanding it is essential to ensure debts are handled fairly and legally.

Is a Spouse Responsible for Their Deceased Spouse’s Debt?

This is the most common and anxiety-inducing question I receive. Generally, a spouse is not automatically liable for the debts of their deceased spouse. However, there are critical exceptions. Community property, assets acquired during the marriage, is subject to creditor claims. Conversely, separate property – assets owned before the marriage, or received as a gift or inheritance during the marriage – is generally protected. Family Code § 910 and Probate Code §§ 13550–13554 together define the framework of spousal liability, capping it in many cases. While a creditor can pursue community property assets, they cannot typically come after a surviving spouse’s separate property.

What’s the Deadline for Creditors to Take Action?

Creditors have a limited time to pursue claims against an estate. In California, they generally have one year from the date of the deceased’s death to initiate a lawsuit, as outlined in CCP § 366.2. This one-year statute of limitations is incredibly strict, and – importantly – is not tolled by the probate process. Even if probate proceedings are ongoing, the creditor’s clock continues to run. Missing this deadline can bar them from collecting on the debt entirely.

The CPA Advantage: Stepping Up Basis and Valuation

As a CPA, I bring a unique perspective to estate planning and creditor situations. Often, assets are ‘stepped-up’ in basis at the date of death, which can significantly reduce potential capital gains taxes if those assets are later sold. Properly valuing estate assets is therefore critical, not just for tax purposes but also for accurately assessing the estate’s overall solvency and potential exposure to creditors. Underreporting asset values, even unintentionally, can lead to severe penalties and invalidate creditor protections. A proactive approach, combining legal expertise with financial insight, is the best defense against unexpected creditor claims.

What does a California probate court look for when interpreting testamentary intent?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

When a will is drafted with California probate review in mind, it becomes a stabilizing roadmap rather than a source of conflict. Clear intent, proper authority, and compliant execution protect both families and estates.

Controlling California Statutes on Estate Debts and Creditor Claims

• Debt Priority:
  
  California Probate Code § 11420
  
  Establishes the mandatory statutory order in which estate debts must be paid before any distributions to beneficiaries.
• Probate Creditor Claims:
  
  California Probate Code §§ 9000–9399
  
  Governs how creditor claims must be formally filed in probate and why informal demands, letters, or invoices are legally ineffective.
• Creditor Lawsuit Deadline:
  
  California Code of Civil Procedure § 366.2
  
  Imposes a strict one-year deadline from the date of death for most creditor lawsuits, which is not tolled by probate proceedings.
• Surviving Spouse Liability:
  
  California Probate Code §§ 13550–13554
  
  Limits a surviving spouse’s personal liability for a decedent’s debts to the value of property received under these statutes.
• Small Estate Threshold:
  
  California Probate Code § 13100
  
  Sets the $208,850 small estate affidavit threshold for deaths occurring on or after April 1, 2025.