Key Takeaways

• Creditors of a deceased person have a limited window to file claims in probate — generally the later of four months after the representative is appointed, or 60 days after they’re given direct notice.
• The representative must give direct notice to known or reasonably ascertainable creditors, which starts their clock.
• Claims are paid from the estate in a statutory priority order — administration expenses first, general debts later.
• If the estate can’t pay everyone, lower-priority creditors may get little or nothing.
• Filing late, or failing to follow the claim process, generally bars a creditor from being paid.

How Debts Get Handled in Probate

A person’s debts don’t vanish when they die — but creditors can’t simply help themselves to the estate, either. Probate provides an orderly process for handling what the deceased person owed: creditors are notified, given a limited window to make claims, and then paid from the estate in a set order before anything goes to the heirs. This protects legitimate creditors while also protecting the estate from stale or improper claims.

For a personal representative, handling creditor claims correctly is one of the more technical and consequential parts of the job — pay the wrong claims, or pay in the wrong order, and the representative can face personal exposure. For a creditor, the rules are strict and the deadlines short, so missing a step can mean not getting paid at all.

The Claim Deadline

California gives creditors a limited window to file claims, and it’s shorter than people expect. A creditor generally must file their claim by the later of:

• Four months after the personal representative is first appointed (when letters issue), or
• Sixty days after the representative mails or delivers direct notice to that creditor.

The four-month period is the backbone — it’s why even a simple probate has a practical floor of several months, since the estate generally can’t close until the window runs. The 60-day piece protects a known creditor who’s notified later in the process, giving them a fresh short window from the date of their notice.

There’s also an outer limit: regardless of probate, claims based on the deceased person’s debts are generally barred one year after death. But within probate, the four-month/60-day structure is what controls.

The Representative’s Duty to Notify Creditors

The representative can’t just wait out the clock in silence. California requires giving direct written notice to creditors who are known or reasonably ascertainable — the ones the representative knows about or could find with reasonable diligence (by reviewing the deceased person’s mail, bills, and records). Publishing the general probate notice reaches unknown creditors; direct notice is required for the ones the representative can identify.

This matters in both directions. Giving proper notice starts the creditor’s clock and, once it runs, cuts off the claim — providing the estate finality. Failing to notify a known creditor can leave the estate (and potentially the representative) exposed to a claim that otherwise would have been barred. So diligent creditor notice is both a duty and a protection.

Serving as representative and unsure which creditors you must notify or which claims to pay? Getting this wrong carries personal risk. Bay Legal can help you handle claims correctly. For guidance on your specific situation, call (650) 668-8000 or schedule a consultation at baylegal.com/contact.

The Order of Payment

When it’s time to pay, the representative doesn’t pay claims first-come-first-served, or by who’s most insistent. California sets a priority order, and it must be followed. In general terms, the order runs roughly:

1. Costs and expenses of administration (including court costs and the fees that keep the estate running) — paid first.
2. Secured obligations — debts secured by specific property, like a mortgage, handled against that property.
3. Funeral expenses.
4. Expenses of the last illness.
5. Family allowance for the support of the surviving family during administration.
6. Wage claims within limits.
7. General (unsecured) debts — credit cards, personal loans, and the like — paid last.

Within a class, if there isn’t enough to pay everyone in full, claimants in that class are generally paid proportionally. And no lower class is paid until the higher classes are satisfied. (Certain government claims can have their own legal priority.)

When the Estate Can’t Pay Everyone

Some estates are insolvent — they owe more than they’re worth. When that happens, the priority order does the hard work of deciding who gets paid. Administration costs, funeral and last-illness expenses, and the family allowance come first; general unsecured creditors may receive only a fraction, or nothing. Heirs and beneficiaries receive nothing until the debts ahead of them are handled — you can’t inherit from an estate that’s underwater.

Critically, the heirs generally aren’t personally responsible for the deceased person’s debts — the debts are paid from the estate, and if the estate runs out, unpaid creditors generally can’t pursue the family’s own money (with limited exceptions, such as someone who was a co-signer). This is a common source of fear and confusion, and the general rule is reassuring: you don’t inherit your parent’s credit card debt personally just by being their child.

Facing an estate that may not cover all its debts? The priority rules determine who gets paid — and getting them wrong creates liability. Bay Legal can help you navigate an insolvent or debt-heavy estate. For guidance on your specific situation, call (650) 668-8000 or schedule a consultation at baylegal.com/contact.

How This Fits With the Rest of Probate

Creditor claims run during the administration phase, and the four-month window is a major driver of the overall timeline. Administration expenses paid first include the statutory fees. The claim process is part of the representative’s duties, and unresolved claims can delay the final accounting. For the full process, see our complete guide to California probate.

Frequently Asked Questions

How long do creditors have to file a claim in California probate?

Generally the later of four months after the personal representative is appointed, or 60 days after the representative gives that creditor direct notice. Claims are also generally barred one year after death regardless of probate.

Do heirs have to pay the deceased person’s debts in California?

Generally no. Debts are paid from the estate, not the heirs’ personal funds. If the estate runs out, unpaid creditors usually can’t pursue the family’s own money — with limited exceptions like a co-signed debt.

In what order are debts paid in California probate?

By statutory priority: administration expenses first, then secured obligations, funeral expenses, last-illness expenses, family allowance, wage claims, and finally general unsecured debts. Within a class, claims are paid proportionally if funds are short.

What happens if a probate estate can’t pay all its debts?

The priority order controls. Higher-priority claims are paid first; lower-priority and general unsecured creditors may receive only a fraction or nothing. Heirs receive nothing until debts ahead of them are handled.

What happens if a creditor misses the deadline?

A creditor who fails to file within the claim period is generally barred from being paid from the estate, which is part of how probate gives the estate finality.