What Happens If the Estate Doesn’t Have Enough Assets to Cover All Debts, Such as Credit Card Claims? - Florida
The Short Answer
If a Florida estate does not have enough assets to pay every valid debt, the estate is treated as “insolvent,” and creditors are paid in a legally required priority order—not “first come, first served.” Credit card claims are typically lower-priority “all other claims,” so they may be paid only partially or not at all after higher-priority expenses are satisfied.
What Florida Law Says
In Florida probate, the personal representative must identify estate obligations and pay them according to a statutory ranking of classes. If the estate runs out of money before reaching a lower class, creditors in that unpaid class generally receive nothing. If the estate has some money but not enough to pay everyone within the same class, those creditors are paid proportionally (ratably).
The Statute
The primary law governing this issue is Fla. Stat. § 733.707.
This statute establishes the required order of payment for estate expenses and debts (administration costs first, then certain funeral expenses, certain preferred debts/taxes, certain last-illness medical expenses, and so on), with “all other claims”—where many unsecured debts like credit cards often fall—near the bottom, and it requires ratable payment within a class if the estate cannot pay that class in full.
Separately, creditor claims are also subject to strict time limits in probate. Florida’s claim deadlines and notice rules are governed by Fla. Stat. § 733.702 (limitations on presentation of claims) and the outside two-year bar in Fla. Stat. § 733.710.
If you want more background on how claims work generally, see: How Are Creditor Claims Handled in a Florida Estate (and What Do They Mean)?
Why You Should Speak with an Attorney
While the statute provides the general rule, applying it to your specific situation is rarely simple. Legal outcomes often depend on:
- Strict Deadlines: Claims can be barred if not timely filed under Florida’s probate claim deadlines (see Fla. Stat. § 733.702 and the two-year bar in § 733.710), which can dramatically change whether a credit card company gets paid at all.
- Burden of Proof: Not every “bill” is automatically payable—some claims are invalid, undocumented, time-barred, or improperly filed, and the estate’s response can affect liability.
- Exceptions and Asset Classification: Some property may not be probate property (and may not be available to pay creditors), while certain assets (including some trust assets in specific circumstances) can be pulled into the payment analysis under Florida law. Misclassifying assets can create personal representative liability or trigger disputes.
When an estate is insolvent, the personal representative’s decisions about which bills to pay (and when) can be challenged. An attorney can help you apply Florida’s priority rules correctly, reduce the risk of objections, and protect you from avoidable personal liability.
Related reading: What Estate Expenses Can Be Paid Before Beneficiaries Receive Distributions in Florida?
Get Connected with a Florida Attorney
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Disclaimer: This article provides general information under Florida law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.