Short answer. The rule supplies a presumption, not a certainty. It provides that the decedent is presumed to have left no debts if no creditor files a petition for letters of administration within two years after the death. That presumption is what lets the heirs use the extrajudicial route.
What the law says
It shall be presumed that the decedent left no debts if no creditor files a petition for letters of administration within two years after the death of the decedent
Rule 74, Section 1 — Extrajudicial settlement by agreement between heirs. Read the full provision →
Why the presumption exists at all
The extrajudicial route opens only where the decedent left no will and no debts. That is an awkward condition to satisfy, because proving the absence of a debt is close to impossible — heirs rarely know every obligation a parent carried. The presumption solves the practical problem. Rather than requiring the heirs to establish a negative, the rule lets silence do the work: if two years pass from the death and no creditor has petitioned for letters of administration, the no-debts condition is taken as met.
Read the trigger precisely
The presumption is not worded around creditors generally staying quiet. It turns on a specific act — no creditor files a petition for letters of administration within the two years. That is a narrower event than a creditor asking to be paid. A lender who has written to the family, or one who has sued someone else over the same debt, has not necessarily done the thing the rule measures. Before relying on the two years, it is worth being clear about what has actually been filed, rather than about who has or has not been in touch.
A presumption is not a discharge
This is the point most worth taking away. The rule says the decedent shall be presumed to have left no debts. It does not say that debts are extinguished, nor that a creditor who slept for two years can never be heard. A presumption sets a starting position; it is a very different thing from a bar. The same rule keeps a bond standing with the register of deeds, conditioned upon payment of just claims, which would make little sense if the two years wiped every obligation out.
What this means before you sign
If you genuinely know of an unpaid debt, the presumption does not make it disappear, and proceeding extrajudicially on the strength of the calendar alone is a decision with consequences for the heirs personally. The safer approach is to treat the two years as removing an obstacle to the extrajudicial route rather than as a clearance. Where the estate is substantial, or where you suspect obligations you cannot document, put the facts in front of a lawyer before the deed is drawn and the bond is set.