Dead People Cannot File Bankruptcy by Victoria Ring

Training for attorneys, paralegals and virtual
assistants working under the direction of attorneys in
debtor bankruptcy law. 

The other day, an interesting question came into the
713Training.Com office from a paralegal working on a
Chapter 7 bankruptcy petition.  The debtor was a widow
who claimed most of the debts were only in her husbands
name. The paralegal wanted to know if the debts of a
dead person should be listed on the bankruptcy petition.
She had asked her attorney and he told her to research
the topic and get back to him for a discussion.

But there is no short and sweet answer to this question.
Just like everything else in the legal field, there are
exceptions to every rule. On the surface you would think
that dead people cannot file bankruptcy. Although this
is true, we need to first determine if the debts that
are in the husbands name are connected to the widow who
is filing bankruptcy.

First I asked the paralegal the age of the widow. She
was born in 1949 and had been married to her husband for
34 years. Next, I asked how old the debts were. The
paralegal said a large majority of them had been
established as far back as the 1970s. Next, I asked if
the widow had been employed throughout the marriage. She
had worked as a housewife and was not employed outside
the home.

With the answers to these questions it was easier to
reconstruct the life and times this woman lived in.
First of all, since the widow had not worked outside the
home, it was very likely that any credit accounts she
applied for had to have included the husbands income
when the credit application had been filled out.
Secondly, back in the 1970s it was rare to find a woman
with credit in her name alone. Most credit card
applications forced a woman to list her husbands income
because it was assumed that a husband and wife was one
person.

Therefore, I summarized that the debts the widow claimed
were solely in her husbands name was not a factual
statement. I told the paralegal to have her attorney
pull a credit report and compare it with the debts
listed on the Client Intake Forms. This way, any debts
that were solely in the name of the husband would not
show up on the widows credit report.  Besides, a credit
report would aide in making sure the widow had included
all her debts and not just the debts that she could
recall.

Next, I asked the paralegal when the husband died. The
answer was 2005. Therefore, she needed to find out from
the widow how much money she received after her husbands
death.  This information is then listed under Item 10b
of the Statement of Affairs, which states: List all
property transferred by the debtor within 10 years
immediately preceding the commencement of this case to a
self-settled trust or similar device of which the debtor
is a beneficiary.

If the husband had died less than one year before the
widow filed bankruptcy, a copy of the probate court
documents would need to be provided. The information
from these documents is then listed under Item 4a of the
Statement of Affairs.

Reviewing the probate court documents will also enable
the paralegal to find out exactly what the widow
received as the beneficiary. If she has any of these
items or money in her possession it is considered an
asset and this information is listed under its proper
item category on Schedule B.

So you can see that even though it may sound silly to
ask if a dead person can file bankruptcy, as a
professional working for a bankruptcy attorney, it is
your job to do the research.  Once you obtain all the
facts you then present this information to your attorney
so that he or she can make the decision how best to
protect and represent the debtor in this case.

To receive more bankruptcy petition drafting tips join
The Bankruptcy Club at the 713Training.Com website.

Disclosure: The information contained in this article is
solely intended to increase the skills of paralegals and
other legal staff who are employed virtually or
non-virtually by bankruptcy attorneys. This information
is not to be used by non-attorneys to prepare bankruptcy
petitions for the general public. The information is
solely intended to train legal professionals working
under the direction of licensed bankruptcy attorneys.

AUTHOR BIO:

Victoria Ring is a Certified Paralegal and Bankruptcy
Specialist. She has developed an entire line of training
products and holds several seminars per year in drafting
bankruptcy petitions. Her training materials have been
approved by NALS for 7 CLE credits. Additionally,
Victoria Ring provides speaking and in-house training
services for bankruptcy law firms. Visit her website at
http://www.713training.com

Share your OPINIONS or questions with other paralegals on our Message Board or join our NEW List Serve Email discussion: Click to join our NJParalegalChat