Speaking very generally, the PR does have duties to creditors and may have to pay the debts of the decedent to the extent there are assets to pay debts. In states that I know about creditors can file claims for sums due them. Plus there likely is a state probate law obligation to pay debts. However, this doesn't necessary mean the PR pays monthly bills that come due in the future. (Though as you indicated in your post, you might). You pay the necessary costs of administration of the estate and you may pay the debts the decedent owed when he or she died. I have been a PR several times. In each case I paid things like utilities until I sold the underlying property, paid rent until the property was vacated, and terminated things like phone service. I paid other bills like hospital bills from probate assets, filed an account, and closed the estate.
There are exceptions to this obligation. A personal representative can't pay debts from money or assets that don't go through probate, like joint accounts or IRAs with beneficiary designations or life insurance. The issue then is whether the joint holder or beneficiary of those accounts has a personal obligation to pay the debts. Of course, if the asset has a lien on it the lien would have to be paid to keep the asset. But other than for estate taxes where joint tenants and beneficiaries do have an obligation to chip in to pay the taxes, they may have no obligation or it may depend on the nature of the asset. I don't know as I have never heard of a creditor (other than the IRS) trying to chase this stuff down. Life insurance payouts would be free of creditor claims except the IRS for estate taxes.
(Sometimes there is no probate because of minimal assets. If the assets aren't jointly held state law may require the heirs to the assets to certify that bills have been paid before they can transfer assets to their name.)
You can have trusts involved too, which don't go through probate. In this case the trustee may have similar obligations to pay debts of the decedent.
Back to the issue of the underwater house. Some states' laws make mortgages on homes non-recourse so there is no obligation to pay the mortgage debt. Other states do not allow a mortgage lender a deficiency after foreclosure so there may be nothing to pay there--let them foreclose or give them a deed in lieu. Most if not all states require a court determination of a deficiency even if one is allowed on a foreclosure. What are the odds of a mortgage lender trying to hold up an estate just to bring a court case to foreclose and establish a deficiency? That said, the mortgage lender may choose to file a claim against the estate for the entire amount of the debt but if I was the PR I likely would object to the claim. But I have no personal experience with that issue and don't know how probate courts deal with secured claims, which is a state law issue in any event. My anecdotal experience is that lenders who are not paid take their collateral back (cars, homes) and they don't think about deficiency claims. Probably because often there often are minimal if any other assets to chase down.
See my signature. And note that I am speaking very generally as these issues in large part are a matter of state law and I am NOT a probate lawyer.
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