Source: https://blog.ceb.com/2018/03/09/how-to-get-paid-when-the-debtor-has-died/
Timestamp: 2019-04-22 08:05:00+00:00

Document:
March 9, 2018 February 15, 2018 / Julie Brook, Esq.
The most orderly way to collect a deceased debtor’s debt is through the creditor’s claim procedure in a probate administration or a claim on a trust. Once a creditor determines that the debtor has died, here are the steps to take to recover on the debt.
Determine whether a probate administration has started. If it has, the creditor shouldn’t wait until it receives notice from the personal representative, and instead should demand payment of the debt from the personal representative as soon as possible. The personal representative has a duty to make reasonably diligent efforts to identify reasonably ascertainable creditors of the decedent. Prob C §9053(d). The personal representative must give notice of the administration of an estate to all “known or reasonably ascertainable” creditors of the decedent within either four months after the date the court first issues letters to the personal representative, or 30 days after the personal representative first has knowledge of the creditor. Prob C §§9050-9051.
If a probate administration has started, then file a claim. Creditors need to move fast and file a claim before either four months after letters are first issued to the personal representative, or 60 days after the date notice of administration is mailed or personally delivered to the creditor, whichever is later. Prob C §9100(a). The creditor must serve the claim on the personal representative within the later of 30 days after filing of the claim or four months from the date letters are first issued to the personal representative, whichever is later. Prob C §9150(c). File the claim using a Creditor’s Claim (Judicial Council Form DE-172). See Prob C §9152 on what documents to attach to the claim.
If the creditor is a personal representative or attorney of a personal representative, get court approval. Claims by a creditor who is the personal representative of the decedent or the attorney for a personal representative must be approved by the court or judge. Prob C §9252(a). If the judge approves the claim, the claim is established and must be included with other established claims to be paid in the course of administration. Prob C §9252(b). If the judge rejects the claim, the personal representative or attorney may bring an action against the estate. Prob C §9252(c).
If the claim is rejected, creditor can sue. Once the creditor files the claim, the personal representative must either allow or reject the claim in whole or in part. Prob C §9250(a). The decision must be in writing, and must be filed with the court and served on the creditor. Prob C §9250(b). If it’s rejected, the creditor may sue the personal representative.
If there’s no probate administration, start one. A creditor who seeks to recover a debt from a deceased debtor may initiate a probate proceeding if one has not already commenced, regardless of whether the deceased debtor’s will is in the possession of the creditor. Prob C §§48, 8000. When petitioning the court for a probate administration of the estate of a deceased debtor, the creditor should nominate a personal representative who is likely to be appointed by the court. If the creditor has the original will of the decedent, the choice is easy—the named executor has a right to appointment as long as the petition is filed within 30 days of the date of death. Prob C §§8001, 8420. If there’s no will, the creditor could nominate himself or herself, but the creditor’s priority of appointment is lower than virtually every other interested person. Prob C §8461. Once the probate administration has begun, the personal representative follows the creditor’s claim procedure.
If the deceased debtor’s assets are held in a trust, there’s another procedure. When the assets are in a trust, make a demand on the trustee. If the optional trust claims procedure has been initiated, the creditor must file a claim no later than either four months after the first publication of notice, or 60 days after the date actual notice is mailed or personally delivered to a creditor. The claim must be filed with the court and a copy delivered to the trustee under Prob C §1215. Prob C §19150(b). The trustee must, in writing, allow or reject the claim in whole or in part. Prob C §§19250; 19251(a). A creditor may bring an action on a rejected claim, or may refer the matter to a referee or to arbitration. Prob C §19255(a).
Do nothing and risk it all. If the trust claims procedure has not been initiated, the creditor may need to open a probate administration. If no probate administration or trust claims procedure is initiated and no claim is made, a deceased debtor’s debts are generally barred one year after the decedent’s death. CCP §366.2.
For details on each of these steps, turn to CEB’s Debt Collection Practice in California, chap 14. Also check out CEB’s California Trust Administration, chap 10.

References: §9053
 §9100
 §9150
 §9152
 §9252
 §9252
 §9252
 §9250
 §9250
 §8461
 §1215
 §19150
 §19255
 §366