Have you ever worked for, performed services or supplied goods to a person who has then died before you have received payment? You might be wondering what happens to your debt and if you can still be paid? This is a situation that arises occasionally for business owners giving credit to their customers.The answer in short is yes, you can still pursue that money owed to you. A debtor's death does not extinguish liability for the debt, the debt is carried by the debtors estate which remains liable for the debt. When a person dies in most cases, his/her will appoint executors to administer the estate. Normally if there is an invoice for the debt, the executor will gather this information and make payment from the deceased's assets in the process of administering the estate. A problem may arise if the deceased debtor disputed the debt before death. In this situation the disputed debt is dealt with in the same way as if the debtor was alive - Disputes Tribunal or District Court. The debtor not being alive to give evidence is problematic for the estate which is still required to show and prove it's defence. The other problem that can arise is where the executors say there is no money left to pay the debt. Before a creditor accepts this he/she should be asking to see proof that the estate has no money. CollectIT recommend that if your debtor has died it is important to pass the debt to CollectIT for recovery as soon as possible. The longer you delay, the more likely that the estate may distributed to the beneficiaries. If this has occurred then you can't get this reversed.
