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Overview

Probate is the court-supervised process that organizes a deceased person’s property, pays valid debts, and distributes what remains to heirs. In Nebraska, a personal representative (sometimes called an executor or administrator) runs the estate during probate. The representative has duties to preserve estate property and to pay debts from estate assets when appropriate. See Nebraska’s probate statutes for governing authority: Neb. Rev. Stat. Chapter 30 (Probate).

Mortgage payments — who must pay and what happens if payments stop

Key points:

• The mortgage is a secured debt attached to the property, not a personal obligation automatically transferred to heirs. If a surviving heir receives the property, the mortgage remains attached to that property until paid or the lender forecloses.
• The personal representative should protect estate assets. If estate funds are available, the representative typically pays mortgage installments or otherwise takes steps (for example, arranging a sale) to avoid foreclosure and preserve value for creditors and beneficiaries. See general authority under the probate law: Neb. Rev. Stat. Chapter 30.
• If the estate lacks cash, the personal representative has limited options: (a) arrange a sale of the real estate to pay debts; (b) petition the court for instructions or authority to abandon the property; or (c) ask beneficiaries if anyone will assume the mortgage or refinance. Heirs who accept property subject to the mortgage take it subject to foreclosure risk but are not personally liable for the decedent’s unsecured obligations unless they signed the loan.
• Lenders have remedies under Nebraska property law if payments stop, including acceleration and foreclosure under Nebraska law. For general rules about mortgages and foreclosures see: Neb. Rev. Stat. Chapter 76 (Real Property and Mortgages).

Utilities — continued service, account holder, and risk of shutoff

Key points:

• Utilities (electric, gas, water, sewer) are typically service contracts in the decedent’s name. Utility companies will continue or stop service based on payments and the provider’s rules.
• The personal representative should maintain utilities necessary to preserve the property (heat in winter, refrigeration for perishable items, basic electricity to prevent pipes from freezing, etc.). If estate funds exist, these are reasonable estate expenses.
• Utility companies often require proof (a death certificate and letters testamentary/administration) to move the account or recognize the representative. If bills go unpaid, companies can terminate service in accordance with their rules and state consumer protections.
• State-level consumer assistance and utility complaint information is available from the Nebraska Public Service Commission: Nebraska PSC — Consumer Assistance.

Who is personally liable — heirs, beneficiaries, and co-signers

General rules:

• Heirs and beneficiaries are usually not personally liable for debts that belong solely to the decedent. They do not have personal liability for the mortgage unless they co-signed the mortgage or otherwise personally guaranteed it.
• If an heir accepts property that carries a mortgage, the heir receives the property subject to the mortgage. To keep the property, the heir typically must continue payments, refinance, or negotiate with the lender.
• If neither the estate nor any heir maintains payments, the lender can pursue its security interest and start foreclosure procedures under Nebraska law.

Practical steps for a personal representative or family member

1. Locate all mortgage, loan, and utility statements right away.
2. Apply for letters testamentary or administration from the probate court. Many lenders and utility companies require these documents before changing accounts (Neb. Rev. Stat. Chapter 30).
3. Contact the mortgage lender to notify them of the death. Ask about temporary forbearance, loss-mitigation options, and whether escrowed funds (taxes/insurance) exist.
4. Contact utility providers to transfer the account to the personal representative or a new responsible party and to discuss payment arrangements.
5. Preserve the property: maintain insurance, pay property taxes, and keep utilities on if needed to prevent property damage (these are typically proper estate expenses).
6. If funds are insufficient, consider court options: petition to sell the property, abandon it, or obtain instructions from the probate court about handling the encumbered property.

What if the estate can’t pay mortgage or utility bills?

Options and consequences:

• If the estate cannot meet obligations, the personal representative can seek court permission to sell the property, pay creditors from sale proceeds, or ask the court to allow abandoning the property to the mortgagee.
• Creditors (including mortgage lenders) must follow Nebraska foreclosure procedures for secured property. Foreclosure outcomes depend on how quickly the lender acts and whether someone steps forward to make payments or buy the property.
• For utility services, unpaid bills may lead to termination of service. That can cause property damage (frozen pipes, mold) and reduce estate value; so weigh cost versus risk when deciding whether to keep utilities active.

When to get legal help

Consider consulting a Nebraska probate attorney if any of these are true:

• The estate lacks cash to preserve encumbered property.
• Creditors threaten foreclosure or aggressive collection while probate is pending.
• There is uncertainty about whether an heir will accept or disclaim property subject to debt.
• Complex title or loan issues arise (multiple liens, disputes with lenders, or potential bankruptcy).

An attorney can explain options under Nebraska law, help petition the court for authority (for sale or abandonment), and negotiate with lenders and utility companies.

Helpful links

• Nebraska Revised Statutes — Chapter 30 (Probate): https://nebraskalegislature.gov/laws/statutes.php?chapter=30
• Nebraska Revised Statutes — Chapter 76 (Real Property and Mortgages): https://nebraskalegislature.gov/laws/statutes.php?chapter=76
• Nebraska Public Service Commission — Consumer Assistance (utility complaints and info): https://psc.nebraska.gov/consumer-assistance

Helpful Hints

• Obtain letters testamentary or administration early. Many companies will not deal with anyone without them.
• Keep the lender informed. Lenders often prefer to avoid foreclosure and may offer short-term options if notified promptly.
• Document all payments and communications with lenders and utility companies.
• Maintain insurance and essential utilities to prevent property damage that can reduce estate value.
• If you are an heir, consider whether to accept property subject to a mortgage — acceptance may carry obligations and risks.
• If the mortgage was jointly held (co-signed), surviving co-signers may remain personally liable and should act quickly.