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Illinois Debt Payment Priority
Support GuideIllinois13 min read

Illinois Debt Payment Priority

Illinois debt payment priority runs through seven classes under 755 ILCS 5/18-10, and 18-13 pays same-class claims pro rata when an estate is insolvent.

By Settled Editorial

Illinois sorts every claim against a decedent's estate into seven classes under 755 ILCS 5/18-10, and the representative pays those classes in order. Funeral and administration expenses sit in the first class. Everything else a creditor is owed, including credit cards and most unsecured debt, lands in the seventh. When the money runs out inside a class, 755 ILCS 5/18-13 splits what remains pro rata among the claims in that class. This guide is general information, not legal advice.

The order rarely changes the outcome in an estate that can pay everyone. It decides the outcome in an estate that cannot. If you are administering an Illinois estate where the debts look larger than the assets, the classification in 18-10 tells you who gets paid and who does not.

The Seven Classes Under 755 ILCS 5/18-10

The Probate Act of 1975 divides claims this way, and the wording below tracks the statute as amended by P.A. 102-72, effective January 1, 2022.

  1. First class: funeral and burial expenses, expenses of administration, statutory custodial claims, and court-determined final guardianship fees and costs. Funeral and burial expenses count no matter who paid them, including a surviving spouse, and they cover a burial space, crypt or niche, a marker, care of the space, and interest on those amounts. That interest starts running 60 days after letters of office issue, or 60 days after the amounts fall due if no letters ever issue, up to 9% per year where a contract or law allows it. Guardianship fees awarded under Sections 11a-13.5, 13-3, 13-3.1, 27-1, 27-2, or 27-4 also sit here.
  2. Second class: the surviving spouse's or child's award. The award under 755 ILCS 5/15-1 outranks every creditor except the first class.
  3. Third class: debts due the United States. Federal obligations sit ahead of state and local ones.
  4. Fourth class: last-year care costs and limited unpaid wages. Reasonable and necessary medical, hospital, and nursing home expenses for the decedent's care during the year immediately before death belong here. So does money owed to the decedent's employees, capped at $800 per claimant, for services performed in the four months before death.
  5. Fifth class: money and property the decedent received or held in trust that cannot be identified or traced. If the property can still be traced, it is generally not estate property at all.
  6. Sixth class: debts due Illinois and its local governments. This covers the State plus any county, township, city, town, village, or school district in Illinois.
  7. Seventh class: all other claims. Credit cards, personal loans, utility balances, older medical bills, and judgments land here. In an insolvent estate this is the class that absorbs the shortfall.

A statutory custodial claim in the first class is narrower than it sounds. Under 755 ILCS 5/18-1.1 it belongs to a spouse, parent, sibling, or child of a person with a disability who lived with and personally cared for that person for at least three years, and a court can reduce the amount where the arrangement also benefited the caregiver. Subject to the assets available, the statute sets minimum amounts by the extent of the disability: $180,000 at 100%, $135,000 at 75%, $90,000 at 50%, and $45,000 at 25%. A first-class claim of that size can consume a modest estate before any other class is reached.

What Happens When the Estate Runs Short

An estate is insolvent when valid claims exceed what the estate holds. Families hit this more often than they expect, because retirement accounts, life insurance with a named beneficiary, and jointly held accounts pass outside probate while the debts stay behind.

755 ILCS 5/18-13 controls the payout. The representative pays claims in the order of their classification, and when the estate cannot cover every claim in a single class, the claims in that class are paid pro rata. Each claimant in the class receives the same percentage of what they are owed. No claim inside a class outranks another.

Two consequences follow. Higher classes are paid in full before a lower class receives anything. And beneficiaries receive nothing until valid claims are resolved, which in a genuinely insolvent estate means they receive nothing at all.

Example. An Illinois estate holds $30,000. Funeral and administration expenses total $9,000 and are paid in full from the first class. The spouse's award of $20,000 is a second-class claim, so $20,000 goes there next, leaving $1,000. A $4,000 nursing home bill from the decedent's final year sits in the fourth class and receives the remaining $1,000, which is 25 cents on the dollar. Sixth-class and seventh-class creditors receive nothing, and so do the beneficiaries.

That example also shows why the spouse's award matters so much in a small estate. Under 755 ILCS 5/15-1 the award may not be less than $20,000, plus not less than $10,000 for each minor child of the decedent who lived with the surviving spouse, and it is measured by nine months of reasonable support. Our Illinois spouse's and child's award guide covers how the amount is set and claimed.

Claims Have to Be Filed Before They Are Ranked

Classification only applies to claims that survive the Illinois claim bar. The representative publishes notice once each week for three successive weeks and mails notice to every creditor whose name and address are known or reasonably ascertainable, and the filing deadline in that notice runs no fewer than six months from first publication or three months from mailing, whichever is later, under 755 ILCS 5/18-3. A claim not filed by that date is barred under 755 ILCS 5/18-12, and every claim that could have been barred is barred two years after death regardless.

Expenses of administration and the surviving spouse's or child's award are carved out of that bar by 18-12(a), which is consistent with their place in the first two classes. The Illinois creditor claims guide covers notice, disallowance, and the two-year outer limit.

Secured Debts and the Business Exception

755 ILCS 5/18-14 charges all the real and personal estate of the decedent, plus the income earned during administration, with the claims against the estate, the expenses of administration, estate and inheritance taxes, and legacies. Illinois itself imposes an estate tax but no inheritance tax, so the inheritance-tax reference reaches taxes another state may levy. The statute draws no priority between real and personal property when the court decides what to sell, lease, mortgage, or pledge.

Classification governs how estate funds are divided among claimants. It does not by itself wipe out a lender's lien on specific collateral, so a mortgage or a car loan needs separate handling: either payments continue, or the asset is sold and the lender is paid from the proceeds. Ask an Illinois attorney how a particular lien interacts with the estate before you pay anything.

One narrow exception sits inside 18-13 itself. Where a representative continues the decedent's unincorporated business under 755 ILCS 5/19-6, the obligations incurred in running that business take priority out of the assets of the business, and without prior court approval they do not reach the rest of the estate.

Paying Out of Order Is Where Representatives Get Hurt

755 ILCS 5/18-13 tells the representative to pay in the order of classification. A representative who pays a seventh-class credit card before a fourth-class nursing home bill, or who distributes to beneficiaries while valid claims are outstanding, has not followed that direction.

What the statute does not do is set a consequence. Section 18-13 states the duty and prescribes no remedy for breaking it, and no other section of the Probate Act declares that a representative who pays out of order owes the difference personally. Where that liability lands, it lands through the general fiduciary rules a circuit court applies when it reviews an account, which makes the outcome depend on the facts, on who was hurt, and on what the court does with the account. So read 18-13 as a clear instruction with an uncertain penalty, not as a statute that fixes your exposure in advance, and ask an Illinois probate attorney what your own situation looks like.

The protection Illinois does give is narrower than most people assume. Under 755 ILCS 5/18-12(d), a representative who acts in good faith to identify creditors and give notice under 18-3 is not personally liable to a creditor who surfaces late. That shield does not cover a claim the representative already knew about and neither paid nor barred, and it says nothing about paying the classes out of sequence.

The common ways exposure arises:

  • Paying the seventh class early because those creditors call the most.
  • Distributing to heirs before the claim date in the published notice has passed.
  • Missing a third-class federal debt or a sixth-class Illinois tax claim that surfaces after the money is gone.
  • Treating the spouse's award as something to settle at the end rather than as a second-class claim.

If the estate might be insolvent, stop and talk to an Illinois probate attorney before you pay any class.

Steps for an Illinois Representative

Step 1: File the inventory before you evaluate claims. You cannot judge solvency until you know what the estate holds. See the Illinois executor duties guide for where the inventory sits in the sequence.

Step 2: Publish and mail notice under 18-3. The claim window is what converts an open-ended list of debts into a fixed one you can rank.

Step 3: Assign every claim a class before you pay anything. Write the class number next to each claim. A claim that arrives with an aggressive collection letter is still a seventh-class claim.

Step 4: Hold the lower classes until the claim date passes. Higher-class claims, particularly federal and Illinois tax obligations, tend to surface late.

Step 5: Compute the pro rata share if a class cannot be paid in full. Divide the money left for that class by the total of the claims in it, then pay each claimant that percentage.

Step 6: Document every payment with its class and date. Your account to the court has to support each disbursement.

The Illinois probate timeline shows how the claim window and the payment sequence fit into the wider administration.

Frequently Asked Questions

What is the order of paying debts in an Illinois estate?

755 ILCS 5/18-10 sets seven classes. Funeral, burial, and administration expenses come first, then the surviving spouse's or child's award, then debts due the United States, then last-year medical and nursing home costs plus limited employee wages, then untraceable trust property, then debts due Illinois and its local governments, and then all other claims.

What happens if an Illinois estate cannot pay every claim?

Each class is paid in full before the next class receives anything. When the estate cannot cover a whole class, 755 ILCS 5/18-13 pays the claims in that class pro rata, so every claimant in the class receives the same percentage. Lower classes and beneficiaries receive nothing.

Does the surviving spouse get paid before creditors in Illinois?

The spouse's or child's award is a second-class claim under 755 ILCS 5/18-10, so it is paid ahead of every creditor except first-class funeral and administration expenses. The award may not be less than $20,000 under 755 ILCS 5/15-1, plus not less than $10,000 for each qualifying minor child.

Are medical bills paid ahead of credit cards in Illinois?

Reasonable and necessary medical, hospital, and nursing home expenses for the decedent's care during the year immediately before death sit in the fourth class. Credit card balances sit in the seventh. Older medical bills that fall outside that final year drop to the seventh class alongside them.

Can an Illinois executor be personally liable for paying in the wrong order?

Possibly, though 755 ILCS 5/18-13 does not say so. That section directs payment in the order of classification and prescribes no remedy for a breach, so a representative who leaves a higher class short answers under the general fiduciary rules the circuit court applies when it reviews the account, not under a penalty written into the Probate Act. The good-faith protection in 18-12(d) covers a creditor who files late after proper notice. It does not reach paying the classes out of sequence. Ask an Illinois probate attorney where that leaves you.

Do family members have to pay the deceased person's debts?

No. Illinois debts belong to the estate, not to relatives personally. A family member is responsible only for a debt they co-signed or held jointly. The estate pays valid claims from estate assets in the 755 ILCS 5/18-10 order.

Related Guides

This guide is general information about Illinois estates. It is not legal advice. Confirm anything that affects your situation with the clerk of the circuit court or a licensed Illinois attorney.

Sources:

It is not legal advice.

Information current as of July 19, 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 Illinois can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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