If a couple files a joint bankruptcy and one of them dies, the Bankruptcy Code states that the bankruptcy case does not automatically end. Instead, the bankruptcy case continues with assets being liquidated as allowed by law and debts being discharged according to the law.
Here’s what you need know:
- If a couple filed bankruptcy together and one of them dies, the case will continue with the surviving spouse. The assets of the deceased spouse will remain with the bankruptcy estate and the case will continue. However, the case may change significantly. For example, if the deceased spouse was the main breadwinner and his death reduced household income, the case may convert from a Chapter 13 bankruptcy to a Chapter 7 bankruptcy .
- If the couple did not have their meeting of the creditors, then the surviving spouse will be allowed to attend the meeting of the creditors and speak on behalf of the deceased debtor’s financial condition.
- If the deceased debtor was married but the surviving spouse was NOT part of the bankruptcy filing, the bankruptcy case will still continue. Also, the surviving but non-filing spouse can still speak on behalf of the deceased debtor’s financial condition. If the deceased debtor was in Chapter 13 bankruptcy, the case will likely be converted to Chapter 7 bankruptcy with assets being liquidated to pay creditors according to the law.
It’s important to note that the surviving spouse may not be allowed to simply dismiss the bankruptcy case. Even if the surviving spouse dismissed the bankruptcy case, creditors could still go after the deceased debtors personal assets.