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Delaware Debt Payment Priority
Support GuideDelaware31 min read

Delaware Debt Payment Priority

Delaware pays the spouse's $7,500 allowance before the funeral bill, and administration costs before both. The full order of preference.

By Settled Editorial

Delaware ranks estate debts on a list twelve rungs long, and the list does not start at the top of the money. 12 Del. C. § 2105(a) has executors and administrators pay claims "after payment of all administration expenses, fees and commissions". Rung one is the surviving spouse's allowance. Rung two is the funeral. An ordinary unsecured creditor is at the bottom.

Every section quoted here was read on September 10, 2026 in the Delaware Code Online at delcode.delaware.gov, and the two acts that shaped this list were read in the Laws of Delaware at legis.delaware.gov. A Delaware estate is opened before the Register of Wills of the county where the decedent lived, and the judicial side of an insolvent estate, including the sale of real estate and any fight over rank, belongs to the Court of Chancery. The directory of all three Register of Wills offices says which one holds the file. This page sets out how the Delaware Code reads rather than how it applies to one estate, and a short estate is where a licensed Delaware attorney earns the fee.

RungWhat 12 Del. C. § 2105(a) puts there
Off the topAdministration expenses, fees and commissions, paid before any rung below
1The surviving spouse's allowance provided in § 2308
2Funeral expenses
3Child support arrears or retroactive support due as of the date of the decedent's death
4The reasonable bills for medicine and medical attendance during the last sickness, and for nursing and necessaries for the last sickness
5Wages of servants and laborers employed in household affairs or in the cultivation of a farm, with no servant or laborer allowed the preference for more than 1 year's wages
6Taxes imposed by the State
7Rent for not exceeding 1 year, and at the election of the party entitled this may be rent in arrear or rent growing due
8Judgments against the decedent, which include judgments before justices of the peace and decrees of a court of equity against the decedent for the payment of money
9Recognizances, mortgages and other obligations of record, for the payment of money
10Obligations and contracts under seal
11Contracts under hand for the payment of money, or delivery of goods, wares or merchandise
12Other demands

The section's oldest source line is 12 Del. Laws, c. 13, § 1, and its most recent touch is 70 Del. Laws, c. 288, § 6, approved July 28, 1995. Nothing has amended it since. That age shows in rungs 9 through 11, which sort creditors by the formality of the paper rather than by the kind of debt. A later section returns to what that costs a reader holding a modern unsecured bill.

Administration Costs Are Not a Rung

Read the opening clause of § 2105(a) before the numbered list. The order applies to "claims against the decedent", and it begins only after payment of all administration expenses, fees and commissions.

So the probate lawyer, the appraiser, the Register's filing fees and the personal representative's own commission are settled off the top of the fund. They cannot be outranked by a rung, because they are not on the ladder. The sequence most national probate pages describe opens instead with the costs of administration as the first class of the ranking itself. A Delaware page built from another state's template usually gets the top of the list wrong twice: it puts administration on the ladder, and it drops the spouse.

12 Del. C. § 2305(a) leaves the size of those charges to the rules of the Court of Chancery rather than printing a percentage. Two things narrow them anyway. § 2305(b) blocks any commission to an executor or administrator who has not complied with Chapter 13 of Title 30, the state withholding chapter, though the penalty waits until a month after the Division of Revenue gives notice of the delinquency. § 2305(c) lets the Court reduce commissions and attorneys' fees where the accounts required by Chapter 23 are filed late.

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The Spouse Outranks the Funeral Home, and the Allowance Expires

Rung one is a $7,500 cash allowance to the surviving spouse, and the reason a small insolvent Delaware estate can pay a widow and nobody else.

12 Del. C. § 2308(a) says the surviving spouse of any decedent is entitled to receive, and the executor or administrator shall pay as soon as convenient, cash up to $7,500 out of the estate, and that the payment is made in the order of preference of § 2105. Subsection (c) then calls the allowance a debt of the estate and lets the representative sell as much of the decedent's property as it takes to pay it, in the same manner as for other debts. Subsection (a) closes by preserving whatever else the spouse takes under the will or the intestacy rules, so the allowance is not credited against a share.

The figure has not moved since 2005. 75 Del. Laws, c. 189, § 2, approved July 12, 2005, amended § 2308 by deleting the phrase "$2,000" at each location and substituting "$7,500" at each location. Compare the section next door: 12 Del. C. § 2306, the small estate affidavit, has been amended five times since that same act and now carries a $50,000 ceiling. The allowance has stayed at $7,500 through all five.

Now the part that catches families. The allowance is a demand, not an entitlement that arrives on its own. § 2308(b) says it "shall be of no effect unless and until" the surviving spouse notifies the Register of Wills of the county where letters were granted, and the executor or administrator, in writing, of the spouse's demand that a specific sum not exceeding $7,500 be set aside out of the proceeds of the estate. Three details in that sentence do real work:

  • Both offices get the notice. Telling the executor alone does not satisfy the subsection, and neither does telling the Register alone.
  • The demand names a sum. The statute asks for a specific figure, not a request for whatever is available.
  • The deadline is whichever period ends first, 9 months from the date of death or 6 months from the grant of letters. Letters granted promptly make the 6-month clock the binding one, and a family that waited to open the estate can find the 9-month clock closing first.

Miss it and rung one is empty, which pushes the funeral home to the front. The wider set of spousal claims, including the elective share, belongs with surviving spouse rights.

Rung Three Is Child Support, and It Was Added Deliberately

Delaware seats unpaid child support above the last-sickness bill, above state taxes and above every judgment. The placement was a deliberate 1995 amendment, and the act that made it says so on its face.

70 Del. Laws, c. 288, the child support enforcement act approved July 28, 1995, amended § 2105(a) at its section 6 by adding a new paragraph reading "Child support arrears or retroactive support due as of the date of the decedent's death", and renumbered every rung below it one step down. Section 9 of the act made that amendment effective on enactment rather than on the January 1, 1996 date it gave the rest of the bill.

Two consequences for an estate that cannot pay everyone. Arrears fixed as of the date of death are a rung 3 claim rather than an ordinary demand, so a support order that went unpaid for years outranks the hospital. And retroactive support "due as of" the death is inside the rung, while support that would have accrued after the death is not a claim of this kind at all.

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Inside a Rung, Delaware Forbids Preference

12 Del. C. § 2105(b) is one sentence and it settles two arguments at once. No preference is given in the payment of any claim over any other claim of the same class, and a claim due and payable is not entitled to a preference over claims not due.

A creditor who filed first, called most often or holds the oldest invoice gains nothing over a creditor on the same rung. And a bill that has already matured gains nothing over one that has not, which stops a personal representative from clearing the invoices currently on the desk while a larger obligation of the same rung waits on a future due date.

Notice what the Code does not print. Delaware states the ranking and bans preference within a rung. It gives no formula for splitting a rung that cannot be paid in full, the way some state codes print an express pro rata rule. Where a Delaware rung runs short, the shape of the split is a question for the Court of Chancery under § 2106 and for a Delaware attorney, and this page will not read a rule off a statute that does not contain one.

The same silence sits under rungs 9 through 11. "Obligations of record", "contracts under seal" and "contracts under hand" are categories from a world of sealed instruments. Where a modern credit card balance, a debt one person took on for another, or an unpaid contractor invoice lands among those three, or drops to rung 12, is an argument about the paper rather than about the debt. That is exactly the argument § 2106 exists to end.

Recorded Mortgages and Judgments Are Not in This Queue

The largest debt on many Delaware estates never competes on the ladder at all.

12 Del. C. § 2103 deems an executor or administrator to have notice only of mortgages, and of such judgments as would be liens against real estate at the date of death of the decedent, where those mortgages and judgments are of record in the county in which letters were granted, unless they were never entered in the general indices. 12 Del. C. § 2102(a) then excepts those debts from the 8-month bar that ends every other claim.

So a recorded mortgage is enforced against the house. The lender does not need to present a statement of claim to the Register, and it does not queue behind the spouse's allowance for the general fund. Rungs 8 and 9 catch the judgments and obligations of record that were not liens on Delaware real estate at the death.

One boundary is worth reading twice, because it splits a single loan in half. § 2103 expressly excludes the bond accompanying a mortgage, and § 2102(e)(1) bars any claim for a deficiency based on such a bond after 8 months from the death. § 2102(e)(2) then says that failing to present the bond claim does not invalidate the bond so as to prevent foreclosure at any time afterwards. The house stays reachable. The shortfall stops being an estate claim. Whether a claim survives at all, and how it is presented, belongs with whether a claim is even in the queue.

Selling the House Switches to a Different Ladder

Delaware real estate is not automatically available to pay debts, and when it is sold the proceeds do not simply pour into § 2105.

12 Del. C. § 2701(a) lets the personal representative petition the Court of Chancery of a county holding the decedent's real estate, where the personal estate is not sufficient to pay the debts, for an order to sell the whole of it or part. § 2701(b) requires 10 days' written notice of the intention to present that petition, given to the interested parties, to the guardians of any minor parties where both reside in the State, and to the tenants in possession of the premises to be sold. Parties outside Delaware are served or notified as the Court of Chancery prescribes. § 2702 gives a creditor its own lever: an application to the same Court for a citation ordering the representative to show cause why the creditor should not present a § 2701 petition, and where the hearing shows a deficiency of assets and that the creditor will be remediless without a sale, the Court may order the petition filed by a date it fixes.

Then § 2710 applies the money. After the Court allows all just charges, the purchase money goes out on two classes rather than twelve:

  1. First class. Judgments against the decedent that were liens on the premises sold before the sale, together with recognizances and mortgages the decedent entered into or executed with a condition for the absolute payment of money or interest, which were liens on the premises before the sale. Those three are of equal grade among themselves, and are preferred in payment according to the legal priority of their respective liens. No debt belongs in this class unless it was a lien on the premises sold before the sale.
  2. Second class. All other outstanding debts of the decedent, observing the same rule of priority prescribed by § 2105.

Read the two together and a common misreading falls apart. Selling the house does not hand the surviving spouse a first call on the proceeds. The lienholders on that parcel are paid first, and the § 2105 ladder starts again on what is left. § 2711 sends any surplus after all debts to the person to whom the premises belonged at the time of the sale, in the same proportion, quantity and manner of interest that person held in the property sold. The mechanics of a sale, and who signs, sit with selling inherited property in Delaware.

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Two Sections Protect the Executor Who Is Paying

Paying out of order is a fiduciary risk, and Delaware answers it twice.

12 Del. C. § 2106 covers the representative who cannot decide between two or more creditors which demand takes preference. On petition to the Court of Chancery the parties in interest are summoned, the Court determines the order of preference after a hearing, and on complying with that determination the petitioner and the petitioner's sureties are discharged from all further liability in respect to the preference made by the Court. That last clause is the reason to use the section rather than guess.

12 Del. C. § 2107 covers ordinary timing. Where the executor or administrator pays a claim of lower preference more than 3 months after the grant of letters, and before a claim of higher preference has been presented under § 2104, the payment is allowed. Read the section for what it does: it protects a payment already made during a senior creditor's silence. It gives no cover for ignoring a claim that has arrived. Paying, rejecting and accounting are all duties with their own exposure, which is why they belong with what the executor has to do.

A Federal Claim Jumps the Whole List

State law sets the order among ordinary creditors. It does not bind the United States.

31 U.S.C. 3713(a)(1)(B) says a claim of the United States Government shall be paid first when the estate of a deceased debtor, in the custody of the executor or administrator, is not enough to pay all debts of the debtor. That condition describes an insolvent estate exactly. Subsection (a)(2) removes cases under title 11 from the rule.

Subsection (b) is the one to read before writing any check. A representative of an estate who pays any part of a debt of the estate before paying a claim of the Government is liable to the extent of that payment for the unpaid claims of the Government. The exposure is personal and it attaches to the payment rather than to the estate. Unfiled federal income tax, an overpayment a federal agency is chasing or a federal student loan balance all raise the question, and an estate carrying one should have counsel before rung one is paid.

Where the Medicaid Claim Sits

Delaware runs Medicaid estate recovery through 25 Del. C. ch. 50, administered by the Department of Health and Social Services, and the chapter never assigns itself a rung on the § 2105 ladder. It works through two instruments instead.

25 Del. C. § 5002(a) creates a lien, before death, against the real property of a person aged 55 or older who receives services in a long-term care facility paid fully or partly by the Department, after notice and an opportunity for a hearing to establish that the person cannot reasonably be expected to return home. § 5002(b) blocks the lien while a spouse, a child under 21, a blind or permanently and totally disabled child, or a sibling with an equity interest who lived in the home for at least a year before the admission, is lawfully residing there. § 5002(c) attaches it on recording at the Recorder of Deeds in the county where the property sits, and § 5002(e) dissolves it if the person is discharged and returns home.

25 Del. C. § 5003 then has the Department seek recovery for disbursements made on behalf of an individual receiving long-term care, from that individual's estate or upon sale of property subject to a lien. The section gates recovery of correctly paid assistance on two conditions:

  • Deaths. Recovery waits until after the death of the individual and the death of a surviving spouse who was residing in the home on a continuous basis.
  • Protected residents of a liened home. Recovery on a lien against the home waits while there is a surviving blind or disabled child who lived there continuously before the death, a nondisabled child or sibling who lived there for at least 2 years before the admission, has lived there continuously since, and can establish to the Department's satisfaction that the care they gave kept the individual out of a facility, or a minor child who lived there continuously before the death and has not reached majority.

§ 5005 requires the Department to waive § 5003 where recovery would work an undue hardship, for as long as that condition continues.

Two readings follow, and both are narrower than the summaries families usually find. A recorded lien is enforced against the property it sits on, which is a different mechanism from queuing on the ladder. A claim presented against the estate is a claim of the State, and 12 Del. C. § 2102(a) bars a claim of the State at 8 months from the death like any other. As for how far the word "estate" reaches, § 5001(c) attaches its Chapter 19 qualifier to personal property and puts no qualifier on real property at all, so a family holding a house should take that question to a Delaware elder law attorney instead of to any table.

Property That Left the Estate Can Still Be Reached

An insolvent probate estate does not end the inquiry where a Delaware transfer on death deed moved the house.

25 Del. C. § 215(a) says that to the extent the transferor's probate estate is insufficient to satisfy an allowed claim against the estate, or a statutory allowance to a surviving spouse or child, the estate may enforce the liability against property transferred at death by a transfer on death deed. § 215(b) apportions that liability among several such properties in proportion to their net values at the death. § 215(c) requires the proceeding to be commenced no later than 8 months after the death, the same outer figure as the claim bar.

Notice that the subsection names the statutory allowance beside the allowed claim. A surviving spouse whose § 2308 demand cannot be paid out of an empty probate estate is inside the class § 215 was written for. The deed's own mechanics, and the recording rules that decide whether it worked, sit with the Delaware transfer on death deed.

Beneficiaries Are on a Separate Ladder Entirely

Creditors and beneficiaries are never on the same list, and mixing them is the fastest way to misread a short estate.

12 Del. C. § 2317(a) abates the shares of distributees in this order: property not disposed of by the will, then residuary gifts, then general gifts, then specific gifts, with personal property abated before real property inside each class. Abatement within a class is proportional to what each beneficiary would have received on a full distribution. § 2317(b) yields to a contrary order stated in the will, or where the testamentary plan would be defeated by the statutory order.

12 Del. C. § 2312(b) is the sentence that keeps a personal representative out of trouble while the debts are unresolved. Payment or delivery of any legacy may be refused if it is apparent that there are not assets for the purpose, and a representative who knows of any demand, outstanding or potential, is not obliged to pay a legacy or distributive share unless the person entitled gives security, bound in a penalty double the value of the gift, to refund it if the assets turn out to be deficient. § 2318 then requires a legatee who has to return part of a paid legacy to return only a proportional part.

An Insolvent Estate Cannot Use the Affidavit

The $50,000 route is closed to the estate that needs this page, and the reason is written into the affidavit itself.

12 Del. C. § 2306(a) lets a qualifying person collect and distribute a decedent's personal estate without letters, on an affidavit sworn to several conditions. Paragraph (4) requires that all known debts of the decedent are paid or provided for. Paragraph (5) requires that the surviving spouse's § 2308 allowance has been paid, provided for, waived, or has expired by lapse of time under § 2308(b). Paragraph (6) requires that the decedent owned no Delaware real estate solely or as a tenant in common.

An estate whose debts exceed its assets cannot swear to paragraph (4). Signing it anyway carries a consequence the next paragraph spells out: § 2307(a) makes the distributees answerable to any person having a prior right and accountable to any personal representative appointed afterwards. The affidavit route and its limits are set out in the Delaware small estate affidavit, and the full administration it sits beside is described in how Delaware probate works.

A Worked Example

A Wilmington decedent dies leaving a house worth $190,000 with a recorded $175,000 mortgage, $9,000 in a checking account, and no other assets. The claims are a $12,000 funeral bill, $28,000 of hospital and nursing charges from the last illness, $6,200 on two credit cards, and a surviving spouse who demands the full $7,500 allowance in writing to the Register and the executor 4 months after the death. Administration costs come to $3,100.

Work it in the order the Code prints. The mortgage is recorded, so under § 2103 and § 2102(a) it never enters the queue; it stays on the house. The $9,000 of personal estate is reduced first by the $3,100 of administration expenses under the opening clause of § 2105(a), leaving $5,900. Rung one takes all of it, and the spouse's $7,500 demand is still $1,600 short. The funeral home, the hospital and the card issuers receive nothing from the personal estate.

If the house is sold on a § 2701 order and brings $190,000, § 2710 sends the proceeds to the first class, the recorded mortgage lien, before anything else, and only the balance after the Court's allowance of just charges reaches the second class to be distributed in § 2105 order. The spouse's shortfall, the funeral bill, then the last-sickness charges, then the cards would take their turns in that balance. Change one fact, a second recorded judgment lien or a Medicaid lien under 25 Del. C. § 5002, and the first class absorbs more of it. Nothing in this example is advice about an actual estate, and the arithmetic on any real file belongs to the Register's docket and a Delaware attorney.

When to Call a Delaware Attorney

Most Delaware estates never test § 2105, because there is enough money and the order does not matter. Call a licensed Delaware probate attorney when:

  • the claims presented look larger than the assets, because the twelve rungs then decide who is paid and who is not
  • two creditors both insist they outrank the other, since § 2106 gives the Court of Chancery the job and discharges you on compliance
  • the United States is owed anything, because 31 U.S.C. 3713(b) puts your own money behind the answer
  • the personal estate will not cover the debts and a § 2701 petition to sell real estate is coming
  • the surviving spouse's § 2308 window is running and the estate cannot fund the allowance
  • the decedent received Delaware long-term care, because a § 5002 lien and a § 5003 recovery follow rules of their own
  • a transfer on death deed moved the house and the probate estate cannot satisfy an allowed claim or the allowance
  • an unsecured debt sits somewhere between rungs 10, 11 and 12 and the parties read the paper differently

Frequently Asked Questions

What order does Delaware pay estate debts in?

12 Del. C. § 2105(a) says executors and administrators, after payment of all administration expenses, fees and commissions, pay claims in twelve rungs. First, the surviving spouse's allowance under § 2308. Second, funeral expenses. Third, child support arrears or retroactive support due as of the date of death. Fourth, the reasonable bills for medicine and medical attendance during the last sickness and for nursing and necessaries for the last sickness. Fifth, wages of servants and laborers employed in household affairs or in the cultivation of a farm, capped at one year's wages. Sixth, taxes imposed by the State. Seventh, rent for not exceeding one year. Eighth, judgments against the decedent. Ninth, recognizances, mortgages and other obligations of record. Tenth, obligations and contracts under seal. Eleventh, contracts under hand for the payment of money or delivery of goods, wares or merchandise. Twelfth, other demands.

Does the surviving spouse really get paid before the funeral home in Delaware?

Yes, and it is the single most surprising line in the section. 12 Del. C. § 2105(a)(1) puts the § 2308 allowance at rung one and funeral expenses at rung two. The allowance is capped at $7,500 and has stood at that figure since 75 Del. Laws, c. 189, § 2 replaced the old $2,000 on July 12, 2005. It is not automatic. Under § 2308(b) it is of no effect unless the surviving spouse notifies the Register of Wills of the county where letters were granted, and the executor or administrator, in writing, demanding that a specific sum be set aside. The deadline is the shorter of 9 months from the date of death or 6 months from the grant of letters.

What comes out of a Delaware estate before the order of preference starts?

Administration expenses, fees and commissions. The opening words of 12 Del. C. § 2105(a) are that executors and administrators pay claims against the decedent in the stated order after payment of all administration expenses, fees and commissions. Those charges are not a rung that can be outranked, so the probate lawyer, the Register's fees and the personal representative's commission are settled before rung one. 12 Del. C. § 2305(a) leaves the size of the commission and the attorney fee to the rules of the Court of Chancery, and § 2305(c) lets the Court reduce both where the accounts are filed late.

Are mortgages and judgments part of the Delaware order of preference?

Only some of them, and the recorded ones sit outside the queue in a way that matters. 12 Del. C. § 2103 deems an executor or administrator to have notice of mortgages, and of judgments that would be liens against real estate at the date of death, where they are of record in the county in which letters were granted. § 2102(a) then excepts those debts from the 8-month claim bar entirely. A recorded mortgage or judgment lien is enforced against the property it encumbers rather than competing for the general fund, which is why a lender rarely files anything with the Register. Rungs 8 and 9 of § 2105 catch judgments and obligations of record that were not liens on real estate.

What happens when a Delaware executor pays a claim out of order?

Two sections soften it and one federal statute sharpens it. 12 Del. C. § 2107 allows the payment where more than 3 months have passed since the grant of letters and the higher-preference claim had not yet been presented under § 2104. 12 Del. C. § 2106 lets a representative who cannot choose between two creditors petition the Court of Chancery, have the parties summoned, and take the Court's determination, which discharges the petitioner and the sureties from further liability on that preference. Where the United States is a creditor of an estate that cannot pay everyone, 31 U.S.C. 3713(b) makes a representative who paid any other debt first personally liable to the extent of that payment.

Does the order change when the house has to be sold to pay Delaware debts?

Yes. Delaware real estate is sold to pay debts only on a Court of Chancery order under 12 Del. C. § 2701, and § 2710 then applies the purchase money on a two-class ladder of its own, after the Court's allowance of all just charges. The first class takes judgments, recognizances and mortgages that were liens on the premises sold before the sale, of equal grade among themselves but preferred according to the legal priority of each lien. Everything left drops into a second class and follows the same rule of priority prescribed by § 2105. So the sale proceeds pay the lienholders on that parcel before the spouse's allowance sees any of it.

Where does a Delaware Medicaid claim rank against other creditors?

Delaware's Medicaid recovery statute is 25 Del. C. ch. 50 and it does not assign itself a rung. § 5002 creates a lien, recorded at the Recorder of Deeds, against the real property of a person aged 55 or older receiving long-term care paid by the Department of Health and Social Services, subject to the residency protections in § 5002(b). § 5003 has the Department recover from the individual's estate or upon sale of property subject to a lien, and only after the deaths and in the absence of the protected household members that subsection lists. A recorded lien is enforced against the property it sits on. A claim presented against the estate is a claim of the State, which 12 Del. C. § 2102(a) bars at 8 months like any other. Anyone whose relative received Delaware long-term care should speak with a Delaware elder law attorney before treating the answer as settled.

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It is not legal advice.

Information current as of September 10, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Delaware can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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