Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
When a creditor submits a claim against an estate in South Carolina, the personal representative must follow the procedures set out in the South Carolina Probate Code, Title 62, Chapter 3 (see full chapter).
1. Review and Verify the Claim
Immediately forward the claim to the personal representative. Confirm that the claim meets the requirements of S.C. Code Ann. § 62-3-803 (Proof of Claim), including proper documentation and signature.
2. Check Notice Deadlines
Verify that the claim was filed within the statutory period. Under S.C. Code Ann. § 62-3-802 (Notice to Creditors), creditors must present claims within six months of first publication of notice or within 30 days after actual notice.
3. Evaluate Validity and Priority
Assess whether the claim is valid and check its priority under S.C. Code Ann. § 62-3-816 (Priority of Creditor Claims). Secured claims, funeral expenses, and administrative costs rank highest.
4. Initiate Settlement Negotiations
Contact the creditor or the creditor’s attorney promptly. Propose a settlement amount based on the estate’s assets and other outstanding claims. Maintain written records of all communications for the probate file.
5. File a Petition to Compromise the Claim
If the creditor agrees to a reduced amount, file a petition in probate court under S.C. Code Ann. § 62-3-813 (Compromise of Claims). Obtain court approval to bind the estate and creditor to the agreement.
6. Obtain Court Approval and Distribute Funds
Attend the hearing and secure the judge’s order approving the compromise. After approval, distribute the negotiated amount from estate funds. Finally, file a closing accounting with the court as required by S.C. Code Ann. § 62-3-809 (Allowance of Claims).
Helpful Hints
- Keep detailed records of all communications with creditors.
- Act promptly to avoid missing statutory deadlines.
- Review local probate court rules for county-specific requirements.
- Consider mediation to resolve disputes without litigation.
- Keep beneficiaries informed to maintain transparency.