After Someone Dies What Happens to Their Creditor Debt in Tennessee? Who is Responsible to Pay the Debt?

An individual who dies who owes money to creditors is largely still responsible for that debt after they are deceased.  Specifically, their estate owes the money to the creditors.  Many people are confused about this.  It is important to note that if nobody else was a co-signor or legally responsible for the debt, then family members, even spouses are not necessarily responsible for the debt.  Be very careful when receiving creditor collection calls after your loved ones passing because often they will try to get others to pay the debt of the deceased – often these individuals are not actually legally responsible for this debt.  

Required Notice to Creditors:

If a probate estate is opened up for a deceased person, then the creditors are put on notice of the opening of the estate and they have a certain amount of time (generally 4 months) to file a claim against the estate. See T.C.A. § 30-2-306.  This is a formal requirement and requires an actual filing of the claim in the Tennessee probate estate.  Any and all known creditors must be specifically sent notice of the opening of the estate. See T.C.A. § 30-2-306.  Additionally, an advertisement must be placed in a newspaper on two consecutive weeks to put additional creditors on notice. See T.C.A. § 30-2-306.  If the creditors do not file a claim with the estate within the appropriate statutory time period then their claim can be completely waived.  Additionally, if a probate estate is not opened up in a timely fashion then creditors can actually open up an estate in order to make sure they collect on the amount of money that is owed to the creditor.  Of course this only makes sense if there are actual assets in the estate.  

Creditor Claims Are Extinguished After 12 Months Post-Death:

One other very important thing to know is that if an estate is not opened up until greater than 12 months after death, then you are not required to provide a notice of creditors and the creditor claims against the estate are considered to be expired (except for TennCare).  For this reason, it is extremely important that if you have a claim aga...

When must TennCare be notified of an individual's death under Tennessee law in the context of a probate estate?

Under certain circumstances, TennCare must be provided with notice by the personal representative of the death of an individual in the context of a probate estate in Tennessee.  T.C.A. § 30-2-301 provides that within sixty days of a personal representative's appointment as the personal representative, they are required to execute and file an affidavit with the clerk that the Bureau of TennCare has been notified of the decedent's death if they are older then 55 years of age or are a TennCare recipient.  T.C.A. § 30-2-301(b)(5) provides as follows:

(5) Within the sixty-day period, the personal representative shall execute and file with the clerk of the court an affidavit that the bureau of TennCare has been notified of the decedent's death pursuant to § 71-5-116.

T.C.A. § 71-5-116(c)(2) provides as follows:

(c)(2) Before any probate estate may be closed pursuant to title 30, with respect to a decedent who, at the time of death, was enrolled in the TennCare program, the personal representative of the estate shall file with the clerk of the court exercising probate jurisdiction a release from the bureau of TennCare evidencing either:

(A) Payment of all medical assistance benefits, premiums, or other costs due from the estate under law;

(B) Waiver of the bureau's claims; or

(C) A statement from the bureau that no amount is due.

Therefore, it is clear that when someone is enrolled in TennCare at the time of their death, a release must be filed with the court in the probate estate stating that TennCare has been paid all it is owed from the estate; or that TennCare has waived any claim; or that TennCare has stated that no money is owed.