When a family member dies, her personal assets, real estate, trusts, and her debt fall into a newly formed entity called the “decedent’s estate”. This is a loose term that does not necessarily require probate of a will or an estate of millions of dollars.
Some estates are probated and some are not. However, those who stand to inherit from the deceased relative are called “beneficiaries” of the “estate”.
Let’s assume that a piece of real estate property is being foreclosed when the owner dies. If you are a beneficiary of the deceased’s estate, and stand to inherit all or part of the property being foreclosed, who can file a Bankruptcy on the deceased’s behalf in order to stop the foreclosure proceedings?
Under Bankruptcy Code 11 U.S.C. Section 109, only an “individual” can file a Chapter 13 Bankruptcy case. Therefore, the estate of the deceased cannot file a Bankruptcy case, and an Executor or Administrator on behalf of the decedent’s estate cannot file a Bankruptcy.
However, since beneficiaries stand to inherit the property, and the property is subject to a mortgage and a foreclosure, a beneficiary would be eligible to file a Bankruptcy case and stop a foreclosure sale (as long as that beneficiary would be otherwise eligible to file his own Chapter 13).
If you are in a difficult financial situation and require the services of an experienced bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.