Paying a Creditor’s Claim
Caution: If there is any question that the estate is now, or may in the future become, insolvent, then before paying any Creditor’s Claim, you should wait until:
- The Creditor’s Claim Statute of Limitations period has expired,
- The “ranking” of all debts and expenses is made, and
- The issue of insolvency has been determined. See Estate Insolvency.
If you wish to pay a Creditor’s Claim in full:
- Complete the Creditor’s Claim that you received from the Claimant.
- Make out your check to the Claimant in the amount of the Claim.
- Attach a copy of your check to the original of your completed Creditor’s Claim and file the document with the Court.
- Attach your check to a copy of your completed Creditor’s Claim and mail that document to the Claimant at the address shown on the Claim.
Side-bar: Your author has routinely and satisfactorily used the method of filing with the Court a copy of the Personal Representative’s check to the order of the creditor as evidence of payment of a Claim. If any question arises later as to the check’s receipt, a copy of the cashed check has sufficed. The more formal way of evidencing payment of a Claim is to forward to the claimant along with the check (and a self-addressed, stamped envelope) an original and one copy of a Receipt of Payment on Creditor’s Claim form, requesting the creditor to complete the original and return it (which you then file with the Court). The form omits the amount of payment or a statement that that the Claim has been “paid in full” so that it may be used to satisfy the Court’s requirement that the creditor has released the estate from the Claim, in the case not only where it has been paid in full but also where it has been compromised and paid only in part.
If you wish to pay a Creditor’s Claim only in part, then follow the instructions for Rejecting a Creditor’s Claim.
Caution: Washington law requires that a creditor timely file and serve a Creditor’s Claim before a Personal Representative may lawfully pay the claim. Cloud v. Summers, 98 Wn.App. 724 (1999); Estate of Wilson, 8 Wn.App. 519 (1973) “The nonclaim statute [ie, RCW 11.40.051, providing for the 4-month Creditor’s Claim period] is mandatory and not subject to enlargement by interpretation; and it cannot be waived.” Ruth v. Dight, 75 Wn.2d 660, 669 (1969). Paying a claim before the timely filing and serving of its Creditor’s Claim opens a Personal Representative to the possibility of personal liability to the estate for the amount of the payment. Before paying any claim, insist upon the proper and timely presentation of its Creditor’s Claim (ie, original filed with Court & copy served on Personal Representative or his/her attorney, BOTH within the four-month period).