Inheritance and Property Rights/Guaranty after death
My father signed a "Consumer Guaranty" with a bank so that a "friend" could get a loan to buy a house. He has since passed away and the bank says that is estate is now responsible for the loan. I have read the document and I cannot find any language stating that the guaranty stays in force after death, yet the bank says it does. The "friend" is not in a bankruptcy and is almost 90 days past payment and the bank says they will foreclose and that my dad's estate will be responsible for fees and back payments, ect. What are my options? The guaranty is governed by the laws of Georgia. Thank you.
The bank is right in a sense that the guarantee would survive death but the joker in the deck is what assets are in his estate, if any, that require probate? If you have an insolvent estate, such as one where there are no assets to distribute and any available assets wind up getting sold to pay the probate attorney fees & costs, oh well.
They can file a claim all they want -- the buck stops there. Filing a claim in a probate case doesn't mean they get paid dime one. Let's say the estate has $5,000 of credit card claims, and they turn in a claim for $5,000 on the mortgage; and there is $1,000 available to pay all creditors; assuming their claim is allowed, they would get a pro rata share of the $1,000; in my example $500.00.
The estate's liability does not flow down to you or your siblings; it stops at the estate.
Remember they have an obligation to "mitigate" their damages, that is, minimize them by selling the property in a commercially reasonable (fair) manner.
Remember as well, that threats of legal action don't amount to a hill of beans; also being put in "collections" means nothing -- if the estate gets served with a complaint and summons, with a court case number on it and a statement that the defendant has to respond in 30 days or so, let's talk again.
Feel free to send a follow up question if necessary.