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Ask Terry L. Your Own Question

Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2507
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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whay happens to a unsecured creditor receiving bankruptcy payments

Resolved Question:

whay happens to a unsecured creditor receiving bankruptcy payments if the creditor dies before the end of the bankruptcy
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 1 year ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

The creditors heirs are entitled to receive the payments, generally through the decedent creditor's probate estate.

Terry L. :

Do you have any other questions?

Terry L. :

hi

Terry L. :

did you have questions/

Terry L. :

?

Customer:

yes, mother had made about 19 payments, there is no probate or estate her home was a tod to her son, there is no savings or cash left anywhere

Terry L. :

so the son would be entitled to the payments, just like an inheritance. The debtor is not off the hook, the plan must still pay that creditor (to the heirs)

Customer:

i believe u have misunderstood the question, it was mother who was in bankruptcy, the house will be tranferred to the son, can the unsecured creditoer who has only received 19 pymnts still put a lien on the house, or make the son responsible for the balance of her payments

Terry L. :

So, let me see if I understand: Mom (debtor) was paying creditor monthly payments in a chapter 13 bankruptcy.

Terry L. :

Is that correct/

Customer:

yes

Terry L. :

Who died mom? or person receiving the funds?

Customer:

mom

Terry L. :

I see. So the debtor died, not the creditor.

Terry L. :

Well, 2 things can happen.

Customer:

correct

Terry L. :

If the payments stop, the case will get dismissed.

Terry L. :

The case can continue, if payments are made. the issue though is the discharge at the end of the case.

Terry L. :

Mom's attorney would need to bring a motion to grant discharge and waive the requirement to file certificates at the end of the case.

Customer:

o k , so the son can't lose the house or have to pay the balance left to be paid, the debtor is listed as unsecured in the bankruptcy

Terry L. :

you are confusing creditor and debtor

Terry L. :

mom is the debtor

Terry L. :

bank is the creditor.

Terry L. :

If the case is dismissed, the bank can foreclose on the property, unless the mortgage gets paid.

Terry L. :

Generally, assets are put thru probate, and are liquidated to pay off creditors owed.

Terry L. :

I'm referring to non-mortgage debts

Terry L. :

The creditors may often close the case if the debtor's executor sends them a notice of passing with the death cert.

Customer:

the house does not have a mortgage, the debt is owed to another proffessional person whom is unsecured by a lien or anything against the home

Terry L. :

you should talk to a probate attorney.

Terry L. :

Since the home is paid, there is equity that has to be accounted for

Terry L. :

probate balances assets and debts

Customer:

it seemed like a simple question, i just wanted to make sure that the son can not b held liable for any unpaid, unsecured bankruptcy payments still pending, and end up losing the home or being responsible for unpaid backruptcy debt

Terry L. :

the son is not responsible for the bankruptcy payemnts.

Terry L. :

If the case is dismissed, the creditors have a claim in probate against available assets.

Terry L. :

that is why you should talk to a probate attorney

Customer:

or the balance owed to the person the payments were going to?

Terry L. :

the son can pay off that debt, sure

Customer:

well that's the point, he wouldn't b able to afford to do so, voluntarily or otherwise

Terry L. :

The creditor could have a claim against the assets in probate.

Terry L. :

Now, some assets can pass thru probate clear, so talk to a probate attorney.

Terry L. :

let me know if you have any other questions.

Terry L. :

THanks

Terry L. :

and good luck to alll

Terry L. :

please click accept so the question will close, and I'll get credit for answering. Thanks!

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2507
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
Terry L. and other Bankruptcy Law Specialists are ready to help you

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