If you are planning to file for Chapter 13 bankruptcy, there are a number of considerations you likely have. For example, you are probably wondering whether this is the right approach to eliminating your debt and many people have uncertainty with respect to this process. There are other factors to think about as well, such as the way in which Chapter 13 affects an estate plan.
For example, if someone passes away while they are in the middle of a Chapter 13 repayment plan, what happens to their estate? There are various key questions that require careful consideration.
Chapter 13 repayment plans
One of the key issues to examine with respect to Chapter 13 and your estate is the repayment plan you will have to set up. These plans generally last for three to five years and require regular payments. If someone passes away, it is up to their loved ones and those appointed to oversee their estate to figure out the next course of action. For example, sometimes heirs try to complete the repayment plan, while others try to petition to cancel the repayment plan or allow creditors to seek repayment via the probate process.
Talking to your loved ones
Often, it is very helpful for people to discuss these matters with those they love. If you pass away during your repayment plan, your loved ones will have a lot of emotional hurdles to work through and preparation helps ensure that the right approach is taken. There are other topics to consider with respect to estate planning and Chapter 13 bankruptcy and our website offers more.