Detailed Answer
Disclaimer: This article is for informational purposes only and does not constitute legal advice.
When someone dies in Massachusetts, their estate enters probate under Massachusetts General Laws Chapter 190B. During probate, creditors may file claims against the estate to recover debts. Executors must review each claim carefully. They can accept, deny, or negotiate claims. If an executor suspects that a creditor’s claim is based on predatory lending practices, they can challenge it.
1. Recognize Predatory Lending Indicators
Predatory lending often involves unfair, deceptive, or unconscionable loan terms. Under MGL c.93A (the Massachusetts Consumer Protection Act), such practices may violate state law. Examples include:
- Exorbitant interest rates or fees.
- Lack of clear disclosure of costs.
- Pressure sales tactics on elderly borrowers.
2. Review the Creditor Claim
Executors receive notice of claims per MGL c.190B §3-803. They have three months from the date of mailing to object. To challenge, the executor should:
- Gather loan documents and the decedent’s financial records.
- Identify specific terms that suggest predatory practices.
- Document any deceptive disclosures or undue influence.
3. File an Objection or Exception
If the executor believes the claim is invalid, they can file an exception to the claim in the probate court. Under MGL c.190B §3-912, an action to determine the validity of a claim must start within three months after the court disallows it. The executor should:
- File a written objection in the probate docket.
- Serve the creditor with the objection.
- Request a hearing for judicial determination.
4. Assert a Consumer Protection Claim
If predatory conduct is evident, the executor can bring an independent claim under MGL c.93A within four years of accrual per MGL c.214 §9B. They may seek rescission of the loan, damages, and attorneys’ fees. This action can proceed in the Superior Court.
5. Prepare for Court Proceedings
Courts will weigh evidence of unfair terms and practices. Executors can submit:
- Expert reports on standard lending rates.
- Affidavits about the decedent’s capacity and the lender’s tactics.
- Comparisons to similar non-predatory loans.
Helpful Hints
- Keep all correspondence with creditors in writing.
- Review probate court rules for filing deadlines.
- Document the decedent’s health and financial vulnerability.
- Consult a probate attorney experienced in consumer protection.
- Consider mediation before formal litigation.
- Act promptly to preserve rights under MGL c.93A.