Creditors Must Wait for a Personal Representative
When someone passes away owing debts, creditors cannot simply sue the estate or go after the heirs directly. A personal representative must be appointed first. No proceeding to enforce a claim against a deceased person's estate can begin until that appointment happens. The personal representative must then administer the estate according to probate rules.
No proceeding to enforce a claim against the estate of a decedent or his successors may be revived or commenced before the appointment of a personal representative. After the appointment and until distribution, all proceedings and actions to enforce a claim against the estate are governed by the procedure prescribed by this chapter.
A.R.S. § 14-3104This rule creates an orderly process. Instead of a rush of lawsuits, all creditor claims go through probate. The personal representative must publish notice to creditors, giving them a window to file a claim. Creditors typically have 60 days after receiving notice to submit their claims.
What Happens After Distribution
Once estate assets have been distributed to beneficiaries, a creditor whose claim was not barred still has options. The creditor may pursue recovery from the people who received assets. This includes claims for credit card balances, car loans, medical bills, and other unsecured debts.
Claims are paid in an order of priority set by statute. Secured creditors with a lien on specific property, such as a mortgage, can still enforce their security interest without waiting for a personal representative. They only need to go through probate procedures if they are seeking a deficiency judgment beyond the value of their collateral.