Death and Bankruptcy in Alabama
A lot can happen to a debtor during the 5 years of your bankruptcy plan. Including, unfortunately, death. What happens to a Chapter 13 case when the debtor dies before it is completed? It may not seem obvious why it matters, because your creditors can’t follow you to the Hereafter. But for your loved ones remaining on Earth, you may have had assets tied up in the bankruptcy that they have to deal with. For instance, you may have filed bankruptcy to stop a foreclosure and catch up mortgage payments, and if the bankruptcy were dismissed, you could lose a valuable home to the bank. In this case, it may be advisable to continue the Chapter 13 case. Federal Rule of Bankruptcy Procedure 1016 provides the Court with authority to allow a bankruptcy to continue long after the person who filed it died, where it is practical and in everyone’s best interest to do so. If someone you love has died while in Chapter 13, their decedent estate can continue the bankruptcy case as if the debtor were still alive. You (or whoever state law grants authority over the decedent estate) just have to keep making their payments and fulfill the other duties of a debtor in bankruptcy. The first thing you should do is call their bankruptcy attorney. He will be wondering what to do with the case and will be very glad to hear from you.