- - https://longislandbankruptcyblog.com -

What Happens When a Debtor in a Chapter 7 Bankruptcy Case Dies?

What Happens When a Debtor in a Chapter 7 Bankruptcy Case Dies?Written by Ian Ribald
 
If a debtor in a Chapter 7 bankruptcy proceeding dies during the bankruptcy case, a number of questions are triggered.   Is the debtor’s estate now relieved from the debts listed in the bankruptcy petition? Does the debtor’s Chapter 7 bankruptcy case continue or merely die with him?  Lastly, what are the appropriate procedures that must be taken?
        
The death of a Chapter 7 debtor does not render the bankruptcy case moot; in fact, the case will continue as if the debtor had not died at all. The trustee of the debtor’s bankruptcy estate must continue to administer the case so that it can conclude  in the same or similar manner. 
 
Although the appropriate steps are neither explicitly provided by the Federal Rules of Bankruptcy Procedure or even set out in the Bankruptcy Code, a proper procedure is suggested.
 
The Bankruptcy Court may need to take remedial steps to administer the debtor’s estate or even appoint a guardian for the estate. A deceased debtor may have a personal representative from his probate estate continue the case. That personal representative may appear at the meeting of creditors.  A deceased debtor may also still be entitled to exemptions or even a discharge.
 
Note: Ian Ribald is a summer intern with our firm.  He recently finished his second year of law at Touro Law School.
Be Sociable, Share!
  • [1]
  • [2]
  • [3]
  • [4]
  • [5]