Detailed Answer
When an elderly decedent’s estate faces a creditor claim that appears to involve predatory lending, an executor in Colorado can challenge the claim by following these steps:
1. File a Timely Objection and Disallow the Claim
Under C.R.S. § 15-12-802, creditors must present claims within two months after first publication of notice to creditors (or four months for related parties). Review each claim and formally disallow any you believe are predatory under C.R.S. § 15-12-805. File your written objection with the probate court, clearly explaining why the claim is unenforceable.
2. Gather and Document Supporting Evidence
Collect facts and documents showing the loan’s predatory features:
- Interest rates exceeding Colorado’s usury cap (more than 21% per annum under C.R.S. § 5-12-101).
- Excessive fees or hidden charges violating the Colorado Uniform Consumer Credit Code (unconscionability, C.R.S. § 5-2-302).
- Evidence of the decedent’s diminished capacity or undue influence at signing (medical records, caregiver statements).
3. Request a Court Hearing on the Objection
If the claimant contests your disallowance, file a motion for hearing under C.R.S. § 15-12-805(3). At the hearing, present your evidence and legal arguments. The court will decide whether to allow or disallow the claim.
4. Assert Specific Defenses
At the hearing, you may argue that the claim is unenforceable because it:
- Violates the usury statute by charging interest above 21% (C.R.S. § 5-12-101).
- Is unconscionable due to oppressive terms or unfair surprise (C.R.S. § 5-2-302).
- Rested on a contract voidable for lack of capacity or undue influence.
- Violated the Colorado Consumer Protection Act by engaging in deceptive or unfair practices (C.R.S. § 6-1-105).
5. Appeal an Adverse Ruling if Necessary
If the court erroneously allows a predatory claim, you can appeal under Colorado Appellate Rules. A successful appeal can reinstate your disallowance.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified Colorado probate attorney for guidance tailored to your case.
Helpful Hints
- Act promptly: probate claim deadlines are strict and jurisdictional.
- Maintain thorough records of all correspondence and evidence.
- Engage a forensic expert if loan terms appear unusually complex.
- Obtain clear medical documentation of the decedent’s cognitive capacity.
- Seek a consultation with a probate attorney to evaluate defenses.