When someone dies owing substantial debts, their passing doesn’t eliminate those obligations. Instead, the debts follow them into probate court. The creditors have to pursue collection through estate administration procedures.
This is why and how probate courts handle far more than just will contests and asset distributions. They can be the final battleground for unresolved financial disputes that may have originated years or even decades earlier.
This process is not fast. It can transform substantial loans into long-term interest-free arrangements. By challenging every aspect of foreclosure proceedings across multiple courts and venues, determined debtors can often delay collection efforts for years or even decades. When the original borrower dies during these extended proceedings, the entire dispute can end up in the probate court, where the pattern of delay tactics can often continue through surviving family members.
The recent Estate of Susan Turner-Hargrave, Deceased, No. 05-24-00491-CV (Tex. App.—Dallas June 30, 2025, no pet.), case provides an example. The case involves a home equity loan that was not paid and foreclosure was prevented due to the delays in the litigation and probate process.
Facts & Procedural History
The decedent took out a $380,000 home equity loan in November 2006. It was secured by her residence.
Her husband signed the deed of trust, but did not sign the note. This is likely because his income or credit did not prevented the couple from qualifying for the mortgage.
The couple never made a single payment on the loan. As the court option details, they didn’t make payments from the date of origination through the decedent’s death–which was twelve years later.
When the original lender attempted foreclosure in 2015, the couple filed a federal lawsuit challenging the loan’s enforceability. This federal litigation successfully halted foreclosure proceedings and took three years. The federal court ultimately ruled against the couple in April 2018. The decedent died in July 2018 while their appeal to the Fifth Circuit was pending. That appeal was later dismissed for want of prosecution.
The decedent’s death resulted in a probate estate and an eventually a probate administration in Dallas County in 2019. By this time, the unpaid loan had grown to over one million dollars due to accumulated interest and fees. The lender that had acquired the loan filed a claim against the estate for $1 million dollars. The probate court approved this debt as a preferred claim and lien against the property.
The probate administration then shifted to the foreclosure litigation. The lender filed both a foreclosure sale application under Texas Estates Code 355.155 and an expedited foreclosure application under Rule 736. The probate court granted both applications in April 2021, authorizing foreclosure to proceed.
The surviving spouse refused to accept this resolution and filed a separate lawsuit in July 2021 challenging the foreclosure authorization. His claims included breach of contract and violations of the Texas Property Code and Texas Debt Collection Act. This new lawsuit was eventually transferred back into the underlying probate administration litigation, consolidating all disputes within the probate court’s jurisdiction. The mortgage company then filed foreclosure counterclaims, obtained summary judgment, and ultimately prevailed after the surviving spouse’s appeal.
Why Do All Debts Eventually Lead to Probate Court?
Death does not eliminate financial obligations. Every unpaid debt, unresolved lawsuit, and pending contractual dispute can become part of the deceased person’s estate. There is a process for this in the estate administration rules.
The rules requiresto present their claims to the personal representaitve and/or probate court for approval and payment. This process is intended to ensure that all debts receive are handled in a specific order before assets pass to heirs and beneficiaries.
Thus, while we don’t really think of it this way, the probate system has a debt collection aspect to it. This process operates differently from regular civil litigation for debt collection matters. Creditors cannot simply continue pursuing the deceased person’s assets through normal collection procedures. They have to follow probate-specific rules for claim presentation, approval, and enforcement.
This is why probate courts can handle just about every type of commercial dispute imaginable. Home equity loan foreclosures, business contract breaches, personal injury lawsuits, tax disputes, and professional malpractice claims can all end up in the probate court when the debtors die. The probate judge is then tasked with resolving all of these varied disputes.
What Authority Do Probate Courts Have Over Real Property Foreclosures?
Section 355.155 of the Texas Estates Code allows probate courts to authorize foreclosure sales of estate property when such sales are necessary to pay approved debts. This recognizes that real estate owned by deceased persons are often subject to mortgage liens that require foreclosure to satisfy creditor claims. The probate court is then the primary venue for determining whether these foreclosures should proceed.
The law that applies in probate court is the same as outside of this court, generally. The statute requires creditors to demonstrate that they hold valid liens against estate property and that the debt securing those liens remains unpaid. The probate court then has to consider the same evidence that would be required in regular foreclosure proceedings, including proof of debt, proper assignment documentation, and compliance with notice requirements. The probate court then determines whether foreclosure serves the estate’s best interests.
This authority places probate judges in the position of making determinations about mortgage law, real estate transactions, and commercial lending practices. This brings in all of the nuance, including differences between judicial and non-judicial foreclosure, assignment chains that may involve multiple transfers, and compliance with both Texas Property Code requirements and federal lending regulations.
How Strategic Litigation Can Delay Debt Collection for Years
This case shows how determined borrowers can extract substantial economic value through strategic use of the legal system. Right or wrong, the couple in this case obtained $380,000 in cash through their home equity loan while simultaneously being allowed twelve years of payment-free occupancy of their residence. This outcome resulted from filing various court cases that delayed the foreclosure proceedings.
The borrowers’ federal court challenge in 2015 successfully halted foreclosure for three years despite the ultimate lack of merit in their claims. Even after losing in federal court, the decedent’s death triggered additional delays through probate administration process. The surviving spouse then filed new litigation challenging the probate court’s foreclosure authorization, resulting several more years of proceedings before final resolution.
Each phase of litigation prevented the lender from recovering either the borrowed funds or the securing property. The borrowers effectively converted a $380,000 loan into a twelve-year interest-free occupancy arrangement. While the debt continued to grow through accumulated interest and fees, reaching over one million dollars by the time of probate court approval, the borrowers received the full benefit of both the original loan proceeds and free housing throughout the litigation period.
The Takeaway
While the legal system provides legitimate protections for borrowers facing foreclosure, this case demonstrates how those protections can result in economic benefits far beyond their intended scope. The pattern of successive lawsuits across multiple venues without substantive merit illustrates how determined borrowers can extract substantial value from lenders through systematic abuse of judicial processes. While this is not the intended result, it is the reality of how the law is applied in practice. Debt avoidance might even be part of a persons estate planning.
Do you need help with a probate dispute in Houston or the surrounding area? We are Houston litigation attorneys. We help clients navigate even the most complex estates. Call today for a free confidential consultation, 281-219-9090.
Our Houston Probate Litigation Attorneys provide a full range of services to our clients, including helping with cases where foreclosure and property disputes are at issue. Affordable rates, fixed fees, and payment plans are available. We provide step-by-step instructions, guidance, checklists, and more for completing the guardianship process. We have years of combined experience we can use to support and guide you with guardianship and probate matters. Call us today for a FREE attorney consultation.
Disclaimer
The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have.
