When a person creates an estate plan, they often appoint an executor. This is an individual who is tasked with the responsibility of administering an estate properly after a person passes away. In being given this job, an executor has a variety of duties they must complete before the estate can be closed. During this time, the individual may wonder the rights they have, such as whether or not they are able to file for bankruptcy on behalf of the deceased. To learn more, continue reading below and speak with an experienced California estate planning attorney.
Can an Executor File for Bankruptcy?
After a person dies, their property belongs to their estate. This includes their personal property, real property, tangible and intangible assets, and any debts they may have. In most cases, assets are designated to go to beneficiaries, who are usually loved ones that inherit parts of the estate. However, there are sometimes cases in which this can be impacted, such as if the individual passes away while they are in significant debt. As a result, loved ones may be left wondering who is able to file bankruptcy on behalf of the deceased to prevent them from losing assets that are meant to be inherited.
Bankruptcy Code 11 U.S.C. Section 109 states that only an “individual” can file a Chapter 13 Bankruptcy case. It is because of this that a decedent’s estate is not eligible to file a bankruptcy case. Therefore, an executor or administrator of the estate cannot file for bankruptcy on their behalf. When an estate is created, creditors can file claims with the court about what is owed to them. If the assets exceed the debts, beneficiaries can receive what is leftover in accordance with the deceased’s wishes. If the debts exceed the assets, the assets can be liquidated to pay off the debt and the remaining debt can be written off. Beneficiaries will not have anything to inherit and filing for bankruptcy will not be necessary.
While this is true, it is possible for a beneficiary to save a certain piece of property. If they stand to inherit the property and it is subject to a mortgage and a foreclosure, they are eligible to file a bankruptcy case to stop a foreclosure sale. It is important to know that this is as long as they would be otherwise eligible to file their own Chapter 13.
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Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most. Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.