Four Things You Should Know About Bankruptcy and Death in Texas
1. If a liabilityor dies during bankruptcy, the case does not automatically end. Remember, those obligations are still owed and creditors could come after assets of the deceased money owingor without a bankruptcy discharge. For example, if the obligationor owned property, assets or cash, they could go after those assets with the approval of the court. Only the automatic stay of bankruptcy prevents creditors from pursuing a liabilityor (alive or dead) for reinbursement.
2. If a debtor dies during Chapter 7 bankruptcy and before they have attended the First Meeting of Creditors, someone else can testify on behalf of the deceased arrearsor. If no one testifies on behalf of the deceased balance dueor during Chapter 7 bankruptcy, the case may be dismissed. A bankruptcy dismissal could mean that those debts are still owed.
3. In the case of a Chapter 13 bankruptcy, the court will determine if the bankruptcy rereinbursement plan can be completed without the deceased debtor. The bankruptcy court may decide to convert the Chapter 13 bankruptcy case into a Chapter 7 bankruptcy or to dismiss the case.
4. If the bankruptcy case is dismissed, the deceased money owingor’s spouse may be pursued by creditors for compensatement, even if they are not legally entitled to it. There have been many cases in which creditors attempt to exploit the grief of family members to secure shell outment for the balances of the deceased. If you are the spouse of a deceased Chapter 13 bankruptcy debtor, you may want to request a “hardship discharg e” of your spouse’s obligation. That way, creditors will not be able to harass you for givement.
If a balanceor dies during bankruptcy, the case does not automatically end. Remember, those debts are still owed and creditors could come after assets of the deceased arrearsor without a bankruptcy discharge. For example, if the balanceor owned property, assets or cash, they could go after those assets with the approval of the court. Only the automatic stay of bankruptcy prevents creditors from pursuing a balanceor (alive or dead) for shell outment.
Allmand & Lee are bankruptcy lawyers in Dallas, TX who specialize in consumer bankruptcy and offer bankruptcy services that help good people through one of the toughest times in their life. For more information please visit us at http://www.allmandandlee.com/
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