What to Do After Your Limited Acceptance Is Accepted

A person who has taken limited acceptance (한정승인) must, within 5 days from the day of the limited acceptance, publish a notice to general creditors and recipients of bequests stating that they have taken limited acceptance and asking them to report their claims or bequests within a set period. The reporting period must be at least 2 months (Civil Act (민법) Article 1032). In practice, the notice is published in a daily newspaper.

The starting point is generally taken to be the day you were notified of the decision accepting the limited acceptance, but it is safest to prepare the notice as soon as you receive the written decision. The notice states the deceased's name and last address, the fact of limited acceptance, the reporting period and where to report.

Costs of the settlement, such as notice and auction costs, can be paid from the estate. Keep receipts for these costs and include them when preparing the distribution table.

The notice must also state that anyone who does not report within the period may be excluded from the settlement (Civil Act Article 1032(2) and Article 88(2)).

Send each creditor you know of from the search results or collection notices an individual demand to report their claim. Sending it by certified mail with proof of contents (내용증명) leaves a record of when you notified them. Known creditors must not be left out of the distribution even if they do not report.

The notice states the deceased's name and date of death, the case number and acceptance date of the limited acceptance decision, the reporting period and where to report. Keep all replies and claim reports from creditors, as they form the basis for the distribution table.

Until the reporting period ends, you can refuse payment no matter which creditor presses you (Civil Act Article 1033). If you pay only the creditor who contacted you first, the other creditors' shares shrink, and the person who took limited acceptance may have to compensate them for that loss (Article 1038).

Leave any remaining deposits untouched rather than using them personally. If, after limited acceptance, you hide estate property, use it wrongfully or deliberately leave it off the list, it is treated as simple acceptance (단순승인) and you may end up liable for all the debts.

Property that must be sold, such as real estate, is disposed of by auction under the Civil Execution Act (민사집행법) (Civil Act Article 1037). If a mortgage holder has already applied for an auction, distribution takes place in that procedure. Tax issues can arise during the auction, so check in advance.

When the reporting period ends, you pay the creditors who reported and the creditors you know of in proportion to their claims. Creditors with priority, such as mortgage holders, are paid first, and recipients of bequests receive anything only after all creditors have been paid. When the property runs out, the heir has no obligation to pay the remaining debts from their own property. If there are many creditors and the estate is complicated, estate bankruptcy is sometimes considered.

From the auction proceeds, auction costs and priority claims are deducted first, and the rest is divided among general creditors in proportion to their claims. Preparing a distribution table setting out the basis of the calculation and sending it to the creditors reduces disputes later.

If there are many creditors and the estate includes several kinds of assets, such as real estate, shares and money owed to the deceased, it is not easy for the person who took limited acceptance to draw up the distribution table and run the auction alone. In such cases, another option is to apply for estate bankruptcy so that a trustee appointed by the court handles the settlement. Which is better depends on the size of the estate, the number of creditors and how much time the heir can give.

If the heir personally was owed money by the deceased, that right does not disappear with limited acceptance (Civil Act Article 1031), so the heir can request distribution in the same order as other creditors.

Even after the settlement is finished, creditors can still sue the heirs. If you assert your limited acceptance at that point, the court will order payment only 'up to the value of the estate', and the creditor cannot enforce against the heir's personal property. If you fail to raise this and an ordinary judgment becomes final, it is very hard to challenge later.

Jisan Law handles everything after acceptance in sequence: drafting the public notice, notifying creditors, preparing the distribution table, dealing with the auction, and raising the limited acceptance defense in any lawsuits that follow. If the notice deadline is tight, contact us on the same day you receive the written decision.