How do creditors get paid in an intestate estate?

In Oregon, creditors of an intestate estate (an estate with no valid will) can be paid in several ways. First, the personal representative (the person appointed to administer the estate) must pay any unpaid debts of the deceased. This includes things like medical or credit card bills, or obligations assured by the deceased. The personal representative may also have to sell some of the deceased assets to cover their debts. Creditors have a priority in receiving payment from the estate, which means that they must be paid before any other claimants, such as heirs, can receive anything. The priority of creditors depends on the type of debt. Secured debts, such as mortgages or car loans, are paid first. Unsecured debts, such as credit card bills, are paid second. If there are no assets left to cover the debts, the debts may be discharged. However, the creditors can still try to collect from any of the deceased’s assets that were not used to pay the creditors. If those assets eventually are distributed to heirs, the creditors may use those assets to pay their debts as well. In Oregon, creditors have 4 months from the time of death to make a claim against the deceased’s estate. If they don’t, they cannot pursue payment for the debt.

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How do creditors get paid in an intestate estate?

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