What steps must a personal representative take when a creditor’s claim is filed and denied in a North Carolina estate?

1. Detailed Answer

When someone passes away in North Carolina, their estate often faces creditor claims for debts owed by the decedent. As a personal representative, you hold a crucial role in reviewing, approving, or denying these claims. Handling a denied claim correctly protects the estate and ensures compliance with North Carolina law.

Step 1: Review the Creditor’s Claim

After the clerk of superior court publishes the notice to creditors, creditors have three months to present their claims under N.C. Gen. Stat. § 28A-19-3 (see ncleg.gov/GS_28A-19-3). When you receive a claim:

• Verify the amount and basis of the debt.
• Check supporting documents like contracts, invoices, or statements.
• Confirm whether any part of the debt has already been paid or settled.

Step 2: Decide to Deny the Claim

If you determine the claim is invalid, excessive, or unsupported, you may deny it in whole or in part. Common reasons to deny include statutory time bars, lack of documentation, or contractual disputes.

Step 3: Mail a Notice of Disallowance

Once you decide to deny, you must promptly send the creditor a written notice of disallowance or partial allowance. North Carolina law requires you to mail this notice within 90 days after the first publication date of the notice to creditors under N.C. Gen. Stat. § 28A-19-6 (see ncleg.gov/GS_28A-19-6).

Your notice should include:

• The estate name and court file number.
• The creditor’s name and address.
• A clear statement that the claim is disallowed or partially allowed.
• The date of mailing.

Step 4: Maintain Accurate Records

Keep copies of the disallowance notice, proof of mailing (for example, certified mail return receipt), and any correspondence. These records serve as evidence if the creditor challenges your decision.

Step 5: Monitor for Creditor Lawsuits

A denied creditor has two options to pursue payment:

1. File suit within 30 days after service of your disallowance notice.
2. File suit within 90 days from the first publication date of the notice to creditors, if later.

(See N.C. Gen. Stat. § 28A-19-7 at ncleg.gov/GS_28A-19-7.)

Step 6: Respond to Any Lawsuit

If a creditor files a lawsuit, you must defend the estate. Typical steps include:

• Filing a timely answer or motion in the clerk’s office.
• Gathering evidence to support your denial.
• Attending hearings or mediation if ordered by the court.
• Negotiating a settlement if appropriate.

2. Key Takeaways

• Creditors have three months from first publication to file claims (N.C. Gen. Stat. § 28A-19-3).
• Send a written notice of disallowance within 90 days after first publication (N.C. Gen. Stat. § 28A-19-6).
• Maintain proof of mailing and copies of all correspondence.
• Creditor must sue within 30 days of your notice or within 90 days of first publication (N.C. Gen. Stat. § 28A-19-7).
• Prepare to respond promptly to any lawsuit in the clerk’s office.

Contact Pierce Law Group for Probate Guidance

Navigating creditor claims in North Carolina estates calls for careful attention to deadlines and paperwork. Pierce Law Group’s attorneys guide personal representatives through every step, from claim review to court proceedings. If you need help protecting estate assets and complying with state law, reach out today.

Email us at intake@piercelaw.com or call us at (919) 341-7055 to discuss your probate administration needs.