Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When you serve as an executor in Alabama and face a creditor’s claim that appears rooted in predatory lending to an elderly decedent, you can challenge that claim through the probate process. Follow these steps:
1. Identify Predatory Lending Features
- High interest rates or excessive fees.
- Unclear or deceptive loan terms.
- Pressure tactics or undue influence on the elderly decedent.
2. Research Applicable Legal Defenses
Under Alabama law, potential defenses include:
- Unconscionability: A court may refuse to enforce a contract if it is grossly unfair. See Ala. Code §7-2-302.
- Usury: Claims charging interest above the legal maximum may be invalid. Ala. Code §5-19A-12 limits certain rates in small loan transactions.
- Deceptive Practices: Alabama’s Uniform Deceptive Trade Practices Act prohibits unfair or deceptive acts. See Ala. Code §8-19-5.
3. File a Timely Objection in Probate Court
Creditors must present claims within nine months after probate opens (Ala. Code §43-2-380). As executor, you then have 60 days from the date you mail notice of the claim to object. File your objection under Ala. Code §43-2-381:
- Serve a written objection stating specific grounds (e.g., unconscionability, fraud, usury).
- File the objection with the probate clerk and mail it to the creditor.
4. Litigate the Dispute if Necessary
If the creditor moves to enforce the claim, you can:
- Ask the probate court to set a hearing on the objection (Ala. Code §43-2-383).
- Present evidence of predatory terms, expert testimony on fair lending, and any documentation of undue influence.
- Argue equitable defenses such as unconscionability or lack of assent by the decedent.
Successfully disallowing or reducing the claim preserves estate assets for rightful beneficiaries.
Helpful Hints
- Document every interaction and review loan paperwork carefully.
- Seek records showing the decedent’s cognitive capacity at loan signing.
- Consult financial or forensic experts if terms appear deceptive.
- Track deadlines: probate objections run on strict timelines.
- Consider mediation if court costs threaten estate value.