Post-Mortem Finances: Understanding How Bankruptcy Impacts Your Will

When you file for bankruptcy, the goal is to eliminate excessive debt entirely or to agree to debt repayment with the assistance of the court. However, there are certain debts that cannot be eliminated, such as child support and payment to injured parties in a lawsuit, and debtors may also experience other financial repercussions from this process. But can those repercussions extend beyond the life of the bankrupt individual? How should bankruptcy be accounted for in your will?


When you filing for bankruptcy you alert the court to all of your assets. As assets are the central issue in a will – its general role is to distribute the assets of the deceased. In order to determine what the status of these assets are, there are several questions you need to answer. These questions are easier to answer when you have the support and guidance from a reputable lawyer to help you during the bankruptcy process. For this all you need to do is look for a bankruptcy lawyer near Harrisburg PA or wherever you are to get ensure the process goes smoothly.

First, do you have a spouse and, if so, did you file a joint bankruptcy case? It’s possible for one half of a couple to file bankruptcy separately from their spouse, however in these cases any cosigned debt shifts to become the primary responsibility of the individual who did not file bankruptcy.

On the other hand, if the situation is reversed and your spouse files for bankruptcy and you die shortly thereafter, leaving them significant funds, there is a 180 day window during which the law requires they report this income. This law was put into place to avoid people from filing for bankruptcy right before an ailing loved one dies – the law views such an action as an attempt to avoid paying out of the inherited funds.

There are other concerns regarding the standing of assets if someone dies during the time that they are filing for bankruptcy. Bankruptcy proceedings can extend over many months, and so such an outcome is not entirely uncommon. What happens next depends on what kind of bankruptcy case you are dealing with.

There are two main kinds of bankruptcy: Chapter 7 and Chapter 13. Each has a different set of rules. With Chapter 7 bankruptcy, even if the estate inheritor doesn’t wish to continue the filing, this isn’t entirely under their control. Only the court can dismiss a Chapter 7 filing.

Chapter 13 filings are more flexible. You may discontinue the filing if your spouse dies, or you can continue the suit in as close a manner as possible, acting as though the death has not occurred. If you’ve filed jointly, you cannot drop your own suit, but you can discontinue their portion of it.

While writing your own will is not generally recommended, it should definitely be avoided if you file for bankruptcy. A life disrupting filing of this nature may have widespread ramification that require the help of a legal professional. Protect yourself and your family by making sure all of the legal aspects of your bankruptcy filing are in order by regularly updating your will.