What steps are required to obtain and file satisfaction of creditor claims in a North Carolina probate estate?

Detailed Answer

When someone owes money to a creditor of a decedent’s estate, the personal representative must follow a set process to pay that debt and clear the claim from the estate’s records. Under North Carolina law, creditors must present their claims, the court approves or denies them, and then the estate pays any approved claims. Once payment occurs, the representative must obtain and file a satisfaction of claim to remove the creditor’s claim from the estate ledger and protect the estate from future disputes.

Here are the key legal principles and steps:

• Creditors’ deadline: After the clerk’s notice to creditors (see N.C. Gen. Stat. § 28A-18-1), creditors have 90 days to file a claim. Link: § 28A-18-1.
• Allowance or disallowance: The personal representative reviews each claim. If the claim is valid, the representative petitions the clerk for allowance. The clerk enters an order approving the claim (see N.C. Gen. Stat. § 28A-18-2). Link: § 28A-18-2.
• Payment of approved claims: After allowance, the representative pays from estate funds. North Carolina law requires preference for certain claims (administration expenses first, then funeral, medical, taxes, and others in statutory order).
• Satisfaction of claim: Once paid, the creditor must sign a formal document called a satisfaction of claim. This document states the claim is fully paid and releases the estate from further liability.
• Filing the satisfaction: The representative files the signed satisfaction with the clerk of superior court, who marks the claim satisfied and removes it from the estate docket.

Step-by-Step Checklist

1. Confirm the claim was timely filed under N.C. Gen. Stat. § 28A-18-1.
2. Obtain a court order allowing the claim under N.C. Gen. Stat. § 28A-18-2.
3. Prepare payment by check or electronic transfer from the estate account.
4. Use a standard satisfaction of claim form listing the estate, claimant, claim amount, and payment date.
5. Ask the creditor to sign the satisfaction. If the creditor refuses, consider filing a notice of payment under oath (supported by bank records).
6. File the original signed satisfaction with the clerk’s office. Request a stamped copy for your records.
7. Serve a copy of the filed satisfaction on all interested parties (heirs and devisees) to prevent future disputes.
8. Retain proof of filing and service in the estate files.

Following these steps ensures the estate clears its debts properly and maintains clear records. A properly filed satisfaction protects the personal representative from post-closing claims.

Need Help with Creditor Claims?
Handling creditor claims and satisfactions requires attention to detail and knowledge of North Carolina probate rules. At Pierce Law Group, our attorneys guide personal representatives through every stage of probate administration. Email us at intake@piercelaw.com or call (919) 341-7055 to schedule a consultation.