Q: In researching claims, it appears that there are two statutes of limitations that could apply. One is three months and the other is nine months. How do you know which statute of limitations applies?
A: When determining if a claim is filed timely, you need to review the situation. The general rule is that claims must be filed within three months after the date of first publication of notice. The publication of notice starts the statute of limitation.
However, reasonably ascertainable creditors have to be provided "actual notice" before the statute of limitations starts to run for them. In other words, if a personal representative knows about a creditor, he has to send actual notice to the creditor before the statute of limitations starts to run. A personal representative can't rely on publication of notice alone when there is a known creditor.
Now having said that, there is a nine month-bar on most claims. If a creditor fails to file a claim within nine months of the date of death, he is out of luck. There is an exception for some governmental authorities, but most everyone else looses out if they don't file timely. This nine month-bar applies regardless if the creditor is known or unknown.
You might be thinking, "what happens if the estate isn't opened before the nine month period has run and the creditor can't file a claim because there isn't any place to file it?" Unfortunately, the creditor loses.
If you are a creditor and you know that the nine-month bar is about to run, you can always open the estate so that you can file and preserve your claim. Although rare, a creditor's estate is an option.
Finally, remember that secured creditors have an additional option not available to non-secured creditors. If you are owed money and you had the forethought to record a mortgage to secure your loan, you can still enforce the mortgage against the secured property. You can enforce your claim even if you do it more than nine months after death. However, if you don't file a timely claim, your recovery will be limited to the value of the secured property