Life happens to us all in ways that we cannot expect. Similarly, death has its own challenges that are made even more difficult to navigate due to the Texas Estates Code that changes the rights of decedent’s, heirs, creditors, and borrowers/lenders. Let DFW Peak guide you through this process by providing some general questions that we run into when dealing with Inherited Property.
Are you responsible for the debts of your family?
The general answer is “no.” However, this does not apply if you received/inherited property from your family. Creditors are permitted to collect against you up to the amount that you received from a family member’s estate—but no more than what you received. This includes both probate and non-probate assets, whether you received an inheritance through an account that had a designated beneficiary/pay on death/transfer on death/joint tenants with survivorship.
However, the questions becomes more daunting when a family member’s estate is strapped with debt. While you are not responsible for their debts on a personal level, you are still unable to take any meaningful inheritance from the estate. The only way to potentially inherit anything meaningful is to pay a exorbitant legal fees to maybe make yourself whole at the end of the day. Rather than deal with the headache of the courts, attorneys and creditors, DFW Peak will pay you for your share of the estate. This way, you get paid something immediately instead of possibly nothing after years of headache.
What kind of creditors are there in estates?
Generally, there are two categories of creditors: unsecured and secured. The distinctions are rather intuitive. An unsecured creditor (e.g., credit card debt) is not secured by a specific and identifiable piece of property. Whereas a secured creditor has the debt secured by a specific piece of property (e.g., car loan, mortgage, deed of trust, etc.).
- What rights does an unsecured creditor have to inherited property?
For the most part, unsecured creditors have very few rights and remedies. There are eight classes of creditors under the Texas Estates Code Section 355.102, and unsecured creditors are the last class to have any rights to collect against an estate. However, this does not mean that they will not get paid. Rather, it just means that they get paid last. Upon proper presentation of a claim, an unsecured creditor can have rights to be paid the entire amount requested and can even collect attorney’s fees against the executor/administrator/personal representative that rejects their claim.
- What rights does a secured creditor have to inherited property?
Just because an individual passes away does not mean that the contracts entered into their life go away. So, the mortgage, car loan, personal loan, etc. that your family entered into are still valid and the collateral securing the agreement is still subject to collection for the payment of what still remains owed. Secured creditors are permitted to make an election of a preferred debt or lien against their collateral or they can elect to have their claim treated as a mature secured lien allowing them to collect against the entire estate.
Either way, a secured creditor has enhanced rights beyond that of an unsecured creditor in Texas.
- What can DFW Peak do for the Borrower?
DFW Peak wants to pay its Borrowers to no longer deal with a difficult situation. Rather, let DFW Peak deal with the lenders and the probate process. This way, you can get paid to get rid of a headache instead of essentially making your creditors and attorneys beneficiaries to your family member’s estate.
- What Can DFW Peak do for the Lender?
DFW Peak is highly experienced in dealing with non-performing notes and navigating the estate process in Texas. DFW Peak wants to see its lenders get paid, take their money, and move on from a difficult and confusing situation.
What to do if the estate is facing a Tax Foreclosure?
Unfortunately, you may discover real property of a family member too late or you have put off making payment on the property taxes for one reason or another. In Texas, the county, school district and county hospital gets paid through the property taxes that are collected against the piece of real property. If a decedent failed to pay property taxes during their lifetime or you have failed to pay the property taxes after the fact, the property is subject to foreclosure in which the entire property will be sold to pay the county what it is owed, plus penalties, late fees, and attorney’s fees. In order to avoid a tax foreclosure, you must render payment in full, otherwise the county will move forward with the sale.
DFW Peak is highly experienced in assisting families with avoiding tax foreclosures. Contact DFW Peak today to see what we can do for you!
What to do if a borrower dies?
When a borrower dies and you are owed money on an owner-financed transaction (promissory note + deed of trust) on real property, whether it be a contract for deed, a rent-to-own contract, executory contract, etc., you are unfortunately forced into a difficult situation. The agreement is predicated on payment, but that naturally has stopped due to your borrower passing away.
In Texas, if your contract allows for a non-judicial foreclosure, you are still permitted to exercise this right. However, this right is subject to the borrower’s estate being opened within four years of the borrower’s death. An estate at that point in time would have a right to set aside and void the foreclosure sale.
The cleanest way to foreclose would be a judicial foreclosure, in which you go to the local court to seek relief. This option, unfortunately, requires significant legal fees and can take up to a year to do.
What can DFW Peak do for you?
DFW Peak is experienced in handling estates that are underwater/strapped with debt. We are able to assist both the lender and borrower in any given situation. When death happens, the rights of both parties are inevitably changed in myriad of ways that are both confusing and expensive. Let us help you get money today and leave the rest to DFW Peak Investments. No creditors, no hassle—just the money that you deserve!
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