Four Things You Should Know About Bankruptcy and Death in Texas

1. If a balanceor dies during bankruptcy, the case does not automatically end. Remember, those obligations are still owed and creditors could come after assets of the deceased balance dueor without a bankruptcy discharge. For example, if the money owingor 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 debtor (alive or dead) for disbursement.

2. If a debitor 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 debtor during Chapter 7 bankruptcy, the case may be dismissed. A bankruptcy dismissal could mean that those debits 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 balanceor. 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 balanceor’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 disbursement for the debits 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 liability. That way, creditors will not be able to harass you for disbursement.

 

If a balance dueor dies during bankruptcy, the case does not automatically end. Remember, those debts are still owed and creditors could come after assets of the deceased liabilityor without a bankruptcy discharge. For example, if the liabilityor 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 obligationor (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/