When a debtor in Chapter 7 bankruptcy dies, what happens to the case?
Well surprisingly, the dead don’t get off the hook that easily. According to precedent set by previous bankruptcy cases a debtor can also include the dead. The Chapter 7 bankruptcy case would continue and a judgment will be made based on the available information. If the debtor, who is now deceased, would have received a discharge in life, then he will also receive a discharge in death. Or, on the other hand, creditors may liquidate the estate of the deceased estate to satisfy debts. But if the case is discharged the estate of the deceased cannot be seized and the heirs of the deceased will not be responsible for paying debts in probate court.