What happens if a debtor in chapter 7 bankruptcy dies during the administration of the case? The simple answer is a deceased debtor can receive a discharge of debt, provided the debtor would qualify for a discharge during one’s lifetime. In other words, the case can proceed to completion and you can go to your grave debt free.
The technical answer, of interest to lawyers and judges, is found in the legislative history behind section 727, which provides that an individual debtor includes a deceased individual. Further support is found in Bankruptcy Rule 1016, which provides that death of the debtor shall not stop the case. Thus, a deceased debtor can receive a discharge such that the remaining probate estate [think heirs] is not responsible for payment of the decedent’s debts.
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