Introduction …..

It is a common misconception that that a debt in written off after an individual passes away. This is untrue as any debts need to be paid from the deceased estate before any beneficiaries receive any

When an individual dies, no one is required to settle their debts unless the debts were in joint names, such as a joint loan or overdraft. However, if the deceased individual had assets, they are used

If the deceased person’s debts are greater than the total value of assets within the estate, the estate is insolvent.

If correct rules and procedures are not followed, or mistakes are made, the person or people administering the estate could be held personally liable.

Below we discuss what happens when an estate is bankrupt, who administers the estate of a bankrupt person, and how Wylie & Bisset LLP can assist with any deceased estate queries.

When is an Estate Bankrupt?

Bankruptcy is the legal process that is followed when someone has become insolvency. The Scottish term for bankruptcy is sequestration.  

After someone passes away, their estate is insolvent when there is not enough money to pay off their debts.   

If an executor is appointed and it is established the deceased estate is insolvent, then they have an obligation to take steps to sequestrate the estate.  

If there is no executor appointed, then anyone entitled to act as one can take steps to place the estate into insolvency.

how we
helped Ms M

Sequestration, Unsecure debt

Ms M’s story

Ms M was in a difficult situation with debts that she was unable to offer a fitting monthly repayment on, we discussed her options sensitively and came to a decision that allowed her to erase her debt through sequestration.

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