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Unethical tactics to collect debt from probate estate

This Motley Fool article tells the tale a devoted son who met with unscrupulous tactics from a large bank when he informed the bank his mother was dead.  The bank wanted to know who would take care of his mother's outstanding credit card balance.  He told the bank no one because she was dead.  When they pressed him he told the bank they could try the normal probate procedure.  From there the bank's  representative tried to shame him into paying the outstanding balance on his mother's credit card.

California probate law has a creditors claim procedure that can be very useful when there are large outstanding debts.  During probate, creditors can file claims with the probate estate and in the probate court for whatever amount they claim they are owed.  The executor can approve the claim, deny the claim, or approve it in part and deny it in part.  This can give the executor great leverage to negotiate with creditors because any claim that is denied requires the creditor to file a civil lawsuit if they want to collect the debt.

In a recent Riverside probate I advised an executor to offer all the creditors of the probate estate nine cents on the dollar to settle their debts.  Every creditor accepted the offer because we were able to show the probate estate had very little money and huge debts.  The creditors, including three different credit card companies, knew they were better to take something from the probate estate than to pursue uneconomic litigation in the civil court 

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