Bankruptcy and Probate

[Kreynolds]

Does anyone know, if you've gone through bankruptcy but were able to keep your primary residence, can your creditors come after the real estate after you die?

[justbroke]

Welcome to BKForum.

Generally speaking, a creditor can only get to real property if the underlying state non-bankruptcy laws allow this. A creditor that has a consensual lien against your property--you specifically pledged your property to guarantee or "secure" the loan--will have foreclosure rights despite any non-bankruptcy law. There are other creditors that may have superior lien rights such as mechanicslien for work done on your home.

When a person dies, an estate is created. That estate still owes the creditors of the decedent. If the decedent had discharged debts prior to their demise, then the creditor to whom the debts were owed, would not be able to go after any property. That would be a violation of the injunction against collection. However, if the decedent had accumulated new debt that could attach to the real property, then those new creditors would not be barred against collection.

Bottom line, your mortgagee will always have a lien even if the underlying debt was discharged in the bankruptcy. Taxing authorities, family law judgements and obligations, and other types of creditors may also have liens which can attach to the property.

I guess it's too much of an abstract hypothetical to answer. You'd need specific creditors, a specific debtor, and the specific events and dates of each debt created.

Bottom line is that the property is as exposed as it would be if the debtor were alive. Creditors would receive no new rights just because a debtor discharged has passed.

[Kreynolds]

That was fast, thank you for the quick reply justbroke! Do you know if bankruptcy/probate laws are similar in the U.K. or are they much different than here in the U.S.?

[justbroke]

I could not tell you. I don't practice law in either.

[Kreynolds]

Okay thanks!