NADER & BERNEMAN
How is Debt Treated if Someone Dies During an Ongoing Bankruptcy Case Under Chapter 7 IF THE DECEASED COMPLETED INITIAL COURSE If the deceased completed the initial financial management course and meeting with creditors, there are high chances that the case will be dissolved and he will be granted a discharge.
Under Chapter 7 IF THE DEBTOR DIED BEFORE COMPLETING THE FORMALITIES If the debtor died before completing the formalities, the bankruptcy case is dismissed and the creditors can fulfill their debts by selling off his property.
Under Chapter 13 MONTHLY INSTALLMENTS The survivors may choose to make monthly payments which usually takes 3 to 5 years before the case is completed.
Under Chapter 13 CASE DISMISSAL If the heir goes for a case dismissal, the estate will remain liable to creditors as they do not receive a discharge.
What Should be Done? If the deceased had a large amount of secured debt, one should drop the case and let the creditors have the property to satisfy the debt. But if someone has emotional values attached, they should go-ahead to fight the bankruptcy case to keep it.
LAYOUT BY ANNA KATRINA MARCHESI