Managing mortgage payments and utilities during probate in New Mexico

Disclaimer: This is general information and not legal advice. I am not a lawyer. For advice about your situation, consult a licensed New Mexico attorney.

Short answer — who must pay and what can happen

When a person dies, recurring obligations tied to a deceased person’s real property — most importantly mortgage payments, homeowner’s insurance, property taxes, and utility bills — do not automatically disappear. In New Mexico, the estate and the person appointed to manage the estate (the personal representative, sometimes called an executor or administrator) are responsible for protecting estate property and paying reasonable and necessary expenses of administration. If mortgage payments or taxes stop, the lender or taxing authority can pursue remedies (including foreclosure or tax lien enforcement) against the property even while the estate is in probate.

Detailed answer — rights, duties, and typical outcomes under New Mexico law

1. Who is responsible while probate is pending?

Shortly after death, no single person automatically becomes legally responsible for the deceased person’s debts unless they are a co-signer (for example, someone who co-signed the mortgage). The estate is the primary source for paying debts related to estate property. The court-appointed personal representative has the duty to gather assets, preserve estate property, and pay valid debts and expenses from the estate. That includes making mortgage payments, paying property taxes, maintaining insurance, and keeping utilities on when doing so is a reasonable step to preserve estate value.

2. What if no personal representative has been appointed yet?

There is often a gap between death and appointment. During that gap, family members commonly continue payments to avoid immediate harm (such as foreclosure, loss of heat in winter, or insurance lapses). Payments made by family members may not automatically be reimbursable from the estate unless the court later approves reimbursement or the personal representative admits the debt as an estate expense. To reduce risk, contact the lender and utility providers immediately to explain the situation, provide a copy of the death certificate if requested, and ask about temporary forbearance, billing changes, or short-term accommodation options.

3. Mortgages: lender rights and estate duties

Mortgages are secured debts that run with the property. If mortgage payments stop, lenders can pursue foreclosure against the property even if the borrower is deceased. The personal representative should:

• Locate the mortgage note and contact the lender quickly.
• Continue mortgage and insurance payments from estate funds when available.
• Consider short-term options the lender may offer: forbearance, loan modification, or an allowance to maintain payments while probate proceeds.
• If the estate lacks funds, petition the probate court for authority to sell the real property to pay debts or for other orders to protect the property.

If an heir or family member wants to keep the house, they must either assume or refinance the mortgage (if the lender allows) or buy the property from the estate. If a person signed the mortgage (co‑owner or co‑signer), they remain personally liable and the lender can pursue them for missed payments.

4. Utilities and homeowner obligations

Utility companies (electric, gas, water, sewer, trash) provide service under contract with the account holder. After death, companies often will continue service for a short period but may require immediate payment, a new account holder, or written authorization. Utilities can disconnect service for nonpayment, which can harm the property (frozen pipes, mold, etc.). The personal representative should transfer or maintain accounts and pay necessary bills from estate funds to preserve the property.

5. Property taxes, insurance, and other carrying costs

Property taxes and homeowner insurance are also priority obligations. Unpaid property taxes can result in tax liens or sale. Insurance is critical to protect estate assets; a lapse can give mortgage lenders grounds for force-place insurance and charge the estate. Pay these from estate funds where possible, or ask the court for interim authority to borrow or sell assets to pay pressing expenses.

6. Practical consequences if payments stop

• Lender may accelerate and start foreclosure if the mortgage is delinquent.
• Utility shutoff can damage the home and lower its value.
• Insurance lapse exposes the estate and heirs to risk, and lenders may add forced-place insurance costs to the mortgage balance.
• If the estate cannot pay, the court can order sale of the property to satisfy mortgage and other claims.

7. How probate court and the personal representative handle payments

The personal representative must keep detailed records of estate expenses, seek court approval when required, and pay creditors in the order set by law. In many cases, the representative may ask the probate court for immediate authority to pay necessary expenses or to sell property. If a person pays bills on behalf of the estate without court approval, recovery may be uncertain, so document payments and seek court approval promptly.

8. Practical steps to protect the property and limit liability (suggested workflow)

1. Locate the mortgage, insurance, and utility account information.
2. Contact the mortgage lender and utilities right away; explain the decedent’s death and ask about temporary options.
3. If payments are affordable, continue them from liquid estate funds or a family member’s payment while seeking court appointment of a personal representative.
4. File for appointment of a personal representative quickly — shorter delay limits lender action and helps preserve estate value.
5. Keep property insured and property taxes current so the estate does not lose value to foreclosure or liens.
6. If the estate cannot cover obligations, consider selling the property with court approval or arranging assumption/refinance by an heir who wants the home.

Helpful hints

• Document every communication with lenders, utilities, and tax authorities. Keep copies of bills and payment receipts.
• Do not destroy or alter property; preserving the asset protects everyone’s interests.
• If you expect a quick sale of the house, talk with the lender about a short-term plan to avoid foreclosure during probate.
• Ask the probate court about emergency or interim orders that allow the personal representative to pay necessary expenses before full administration is complete.
• Remember that heirs are usually not personally responsible for mortgage debt unless they signed the loan or otherwise guaranteed it. The lender’s recourse is against the property and any guarantors.
• Consider hiring a probate attorney early. Probate rules, creditor priority, and timelines can be technical.
• Use New Mexico court resources for forms and guidance. The New Mexico Courts provide probate information for people who are handling estates: https://www.nmcourts.gov/self-help/probate/
• For general statutory resources and to look up New Mexico laws, use the New Mexico Legislature website: https://www.nmlegis.gov/

When to consult an attorney

You should consult a New Mexico probate attorney if the estate lacks funds to cover mortgages and taxes, if a lender threatens foreclosure, if multiple creditors dispute priority, or if family members disagree about keeping or selling property. An attorney can help get court authority for payments, negotiate with lenders, and advise about options like assumption, refinancing, or court-ordered sale.

If you want help locating a probate attorney in New Mexico, contact your local county bar association or the State Bar of New Mexico’s lawyer referral service.