How are creditors paid in probate?

In South Carolina, creditors are paid in probate by the Executor or Administrator. The Executor or Administrator will notify creditors of the estate and give them the opportunity to file a claim for payment. If the creditor does not receive payment within a reasonable time, they are allowed to file an action in court. When creditors file a claim, the debt must be verified with supporting evidence such as invoices. If the Executor or Administrator disagrees with the claim, they can challenge it in court. Once all claims have been verified and any disputes settled, the Executor or Administrator will pay the creditors out of the estate’s assets. Generally, the creditors will be paid in order of priority, with secured creditors paid first, followed by unsecured creditors. If there are more debts than assets, the Executor or Administrator will seek court approval to pay the creditors on a pro rata basis. This means that the creditors will receive a proportionate percentage of their debt based on the total amount available for distribution. Once the creditors are all paid, the remaining assets are distributed to the heirs according to the decedent’s will or the state’s laws of intestate succession if there was no will.

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