Are Your Accounts Receivable DOA?

What You Need To Know About Ohio’s Law On Creditors’ Claims Against Estates

Nothing is more frustrating in your business than not being paid by a customer. Collection can get tricky, however, if your business has unpaid accounts receivable due on behalf of a deceased client. There are important rules and deadlines you need to know regarding your rights to collect.

Ohio Revised Code Section 2117.06 provides the procedure by which a creditor must present its claim to an estate. The statute provides in pertinent part that:

All creditors having claims against an estate…whether due or not due, secured or unsecured, liquidated or unliquidated, shall present their claims in one of the following manners: (1) [a]fter the appointment of an executor or administrator and prior to the filing of a final account or a certificate of termination, in one of the following manners: (a) [t]o the executor or administrator in a writing; (b) [t]o the executor or administrator in a writing, and to the probate court by filing a copy of the writing with it…

The statute also says: “all claims shall be presented within six months after the death of the decedent, whether or not the estate is released from administration or an executor or administrator is appointed during that six-month period.” Claims not presented within six months after the date of death of the decedent shall be forever barred as to all parties. Under the plain language of the statute, if there is no appointment of an executor or administrator within six months of the date of death of the decedent, a creditor is out of luck and its claim is forever barred.

Few creditors, however, realize that they can take proactive measures to appoint an executor within the timeframe required to preserve their claim. Depending on the circumstances surrounding the creditor’s claim, there are various, inexpensive approaches to this situation. The important thing to note is that, if you don’t take this affirmative action, your claims are forever barred.

To find out more on proactive strategies for your business, call Bill Williamson at 513-768-9735.

 

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