How Can an Executor Challenge a Creditor Claim on Predatory Lending Grounds for an Elderly Decedent in HI? | Hawaii Probate | FastCounsel
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How Can an Executor Challenge a Creditor Claim on Predatory Lending Grounds for an Elderly Decedent in HI?

August 6, 2025 2 min read

Disclaimer: This article does not provide legal advice. It offers general information under Hawaii law.

Detailed Answer

Legal Framework

When a decedent’s estate enters probate in Hawaii, an executor must address creditor claims under the Hawaii Uniform Probate Code (HRS Chapter 560). Creditors must file valid claims against the estate (HRS §560-3-801). An executor can object to or challenge a claim if it stems from predatory lending, violates usury caps under the state’s lending laws, or amounts to an unfair or deceptive practice under the Hawaii Unfair and Deceptive Trade Practices Act.

Step-by-Step Process

  1. Gather the creditor’s claim—Review the filed claim, including loan agreements, interest rates, and disclosures. Predatory loans often feature excessive rates, hidden fees, or misleading terms.
  2. Check compliance with usury limits—Hawaii caps certain interest rates. See the consumer lending provisions in HRS Chapter 480 (HRS §480-2) and the maximum interest rules in HRS §478-15 (HRS §478-15).
  3. File a written objection—Under HRS §560-3-805 (HRS §560-3-805), file an objection within the deadline (typically 30 days after notice). Clearly state the grounds: usury, unconscionability, or fraud in the inducement.
  4. Request a hearing—If you cannot resolve the dispute, request a court hearing under HRS §560-3-809 (HRS §560-3-809).
  5. Present evidence—At the hearing, submit documentation: loan disclosures, communications, expert testimony on prevailing rates, and proof of the decedent’s vulnerability (e.g., medical records showing diminished capacity).
  6. Pursue remedies—If the court finds predatory terms or statutory violations, seek disallowance or reduction of the claim. You may also request sanctions against the creditor or a referral to the Attorney General.

Potential Remedies

  • Disallow or reduce the entire claim.
  • Recover court costs or sanctions for unfair practices under HRS §480-2.
  • Report unlawful conduct to the Department of Commerce and Consumer Affairs.

Helpful Hints

  • Keep detailed records of every creditor interaction.
  • Maintain copies of all loan documents and disclosures.
  • Track all probate deadlines for filing and objecting to claims.
  • Consider an expert report on market interest rates.
  • Consult a probate attorney when claims exceed estate assets or involve complex issues.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.