Executorship & Bankruptcy
Executorship is the process of administering a deceased person's will. An individual responsible for accomplishing the wishes contained in the will is the executor of the estate. If you are the executor of a person's estate who passed away in the process of a bankruptcy, there are options to consider depending on the type of bankruptcy involved.
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Chapter 7 Bankruptcy
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Chapter 7 bankruptcy asset liquidation continues even if the debtor dies prior to completion of the process. As executor of the estate, you can attend the meeting of creditors provided the deceased has not attended any prior meetings. Generally, debts of the deceased dissolve, known as a bankruptcy discharge.
Chapter 13 Bankruptcy
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Chapter 13 bankruptcy involves a payment plan the debtor must meet to settle amounts due to creditors. If the debtor dies during the process, the case may continue under Chapter 13, convert to Chapter 7 status or be dismissed. When the case continues under Chapter 13, payments to creditors must continue.
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Hardship Discharge
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You can seek a hardship discharge for the estate when Chapter 13 bankruptcies continue after the debtor dies. As executor of the estate, you are required to prove to the bankruptcy court that the death of the debtor creates a situation making continued payments under the plan impossible.
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References
- U.S. Legal: Executor Law & Legal Definition
- Bankruptcy Law Firms: What Happens if a Bankruptcy Debtor Dies
- U.S. Legal: First Meeting of Creditors Law & Legal Definition
- U.S. Courts: Discharge in Bankruptcy (What is a discharge in bankruptcy?)
- Bankruptcy Law Firms: How to Get a Hardship Discharge for a Chapter 13 Plan (Establish a Credible Hardship Claim)
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