If you are in poor health and considering filing bankruptcy you may wish to speak with your Kennesaw bankruptcy attorney about what happens if you die after filing. Naturally, your health should not be a consideration but there is the potential for consequences to your heirs should this occur.
Chapter 7 bankruptcy and death
As your Chapter 7 attorney in Kennesaw probably has explained to you, filing Chapter 7 means you have certain assets that are protected and the balance of your debt is wiped out once the case is dismissed. Should you die after you file Chapter 7, the case will continue as if you were still alive with one exception: If you have not attended a creditor’s meeting, the court could potentially dismiss your petition leaving your estate to pay the bills that you owe.
Chapter 13 is more complicated
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If you are unable to meet the required means test for filing Chapter 7, your bankruptcy attorney in Kennesaw may recommend you file a Chapter 13 bankruptcy. In effect, this type of bankruptcy reorganizes your debts so you can more easily handle monthly payments. If you should die after filing Chapter 13 before you have completed payments, there are a number of options including:
- Continuing payments – your heirs may consider continuing the payments under Chapter 13 which would allow them to take advantage of any debt reductions that were included in your bankruptcy.
- Hardship discharge – in some cases, the courts may grant a hardship discharge; this is more common when there has been a joint Chapter 13 filing but it may also be possible for heirs to request this type of discharge.
- Conversion to Chapter 7- in some cases, it may be possible for surviving family members to request the case be converted to a Chapter 7 filing. Under this scenario, debts that are not cleared under Chapter 7 would be paid with proceeds from assets in the estate.
Without understanding what property you own and what your debts are, it is not possible to determine which course of action would be best for your heirs. For example, if you have a home that you are protecting under a bankruptcy filing, your heirs may have the option of negotiating with the lender to refinance the home. In this case, they could elect to dismiss the Chapter 13 case in order to refinance the home.
Open discussion is important
Unfortunately, there are few things guaranteed and your health could deteriorate suddenly or you could be killed in an accident. While it may be uncomfortable, it is a good idea to discuss the possibility of your death with your Kennesaw bankruptcy attorney so that you understand what impact it will have on your heirs.
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Whether you have experienced a job loss, suffered financially after a divorce or have high medical bills that are weighing you down financially contact a bankruptcy lawyer in Kennesaw to discuss your options. We may be able to help you get back on your feet financially by filing Chapter 7 bankruptcy. If you have a bankruptcy related question or you need help with your finances, contact Roger Ghai, a bankruptcy attorney in Kennesaw at the Law Offices of Roger Ghai at (770) 792-1000.