Short Answer

Yes, but only in the order and on the timeline North Carolina law allows. After you publish and mail the required notice to creditors, you generally wait at least three months before paying claims unless you are certain the estate can pay every valid debt. Pay claims strictly by statutory priority and keep vouchers; paying too soon or out of order can create personal liability.

Understanding the Problem

In North Carolina probate, can an executor use the estate checking account to pay debts and administration costs, and when? You are the executor of a parent’s estate, and the real property was foreclosed, leaving surplus proceeds; you also have funds in the estate account to address bills.

Apply the Law

North Carolina requires personal representatives to identify creditors, publish and mail the statutory notice to creditors, and then pay valid claims and expenses in a specific order. The Clerk of Superior Court (Estates Division) oversees the administration. The key timing trigger is the “creditor window” that runs at least three months from first publication of notice; paying before it closes is risky unless the estate is clearly solvent. Secured claims are honored to the value of their collateral; unsecured claims are paid by priority with no preference within the same class. Administrative expenses (like court costs, bond premiums, reasonable attorney’s fees, and approved commissions) are proper estate charges, but fees and commissions are typically reviewed by the clerk.

Key Requirements

• Open and notice: Qualify, open an estate account, and publish/mail the notice to creditors; the three‑month claims period begins at first publication.
• Wait unless solvent: Do not pay general claims until the creditor window closes unless you are sure all claims and charges can be paid in full.
• Follow priority: Pay by statutory order: administration costs and year’s allowances first; then liened claims, limited funeral and burial place/gravestone amounts, taxes, docketed judgments/DHHS, certain wages/medical, equitable distribution, and finally other claims.
• No preference within a class: If funds are short in a class, pay creditors pro rata; do not favor one over another.
• Secured vs. unsecured: A secured creditor is paid to the value of its collateral; any deficiency is a lower‑priority unsecured claim.
• Documentation and approvals: Keep invoices and receipts. Clerk approval is customary for attorney’s fees and required for commissions; do not pay either in advance.
• Fiduciary caution: Paying too early or out of order can expose you to personal liability and surcharge.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-14-1 (Notice to creditors) – Requires publication and mailing of notice after qualification; sets the creditor window.
• North Carolina Gen. Stat. § 28A-19-3 (Bar of claims) – Bars untimely claims and sets special timing rules.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment) – Establishes the priority classes and pro rata rule within a class.
• North Carolina Gen. Stat. § 28A-13-10 (Fiduciary liability) – Provides for personal liability for improper acts or omissions.

Analysis

Apply the Rule to the Facts: As executor, you can use the estate account and the surplus foreclosure proceeds (once received by the estate) to pay proper charges and claims, but only after notice and by statutory priority. Because the property was foreclosed, any mortgage shortfall would be an unsecured claim. Wait until the creditor window closes unless the estate is plainly solvent; then classify claims and pay in order, keeping vouchers and seeking clerk review of attorney’s fees and any commissions.

Process & Timing

1. Who files: Executor/administrator. Where: Clerk of Superior Court, Estates Division, in the county of administration in North Carolina. What: Publish the Notice to Creditors and file the Affidavit of Notice to Creditors (AOC‑E‑307) with the 90‑Day Inventory; open and fund the estate bank account. When: File the inventory within 90 days of qualification and keep the notice period open at least three months from first publication.
2. After the creditor window closes, classify each claim, confirm validity, and pay by statutory priority. If the foreclosure produced surplus held by a court, coordinate to have it disbursed to the estate, then treat it as available personal property for claims.
3. File required annual or final accounts with receipts/vouchers. Seek clerk approval for attorney’s fees and for any commissions before paying. Close the estate once claims are paid or provided for and the clerk approves the final account.

Exceptions & Pitfalls

• Paying before the creditor window closes can create personal liability if later claims cannot be paid in full.
• No preference within a class—if funds are short, prorate payments among same‑class creditors to avoid an improper preference.
• Funeral expenses have a limited priority amount; burial place/gravestone expenses are limited unless the clerk authorizes more—classify correctly.
• Secured claims attach to collateral; any mortgage deficiency after foreclosure is a lower‑priority unsecured claim.
• Attorney’s fees are administration expenses but are typically reviewed by the clerk; personal representative commissions require clerk approval and should not be advanced.
• If a trusted family friend will join meetings, tell your lawyer so they can document your consent to share information.

Talk to a Probate Attorney

If you’re dealing with paying estate expenses and creditors, including handling foreclosure surplus and timing payments, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.