‘Debt-free’ is not always the state our loved one’s estates are left in when they pass away. Thankfully, the Bankruptcy Act 1966, “The Act” can assist our family when familial trials, conflict and physiological issues arise from a debt-filled estate.
One of the key purposes of the Act is to grant a person relief from debts. If debt issues arise in an estate and there are insufficient assets to pay creditors of the estate, some creditors may chase family members for payment. In these cases, a creditor may argue that a person is liable for the debts of their loved ones’ estate. However, it is important to note this is not the case.
Making a deceased estate bankrupt operates to provide relief for family members so they don’t have to deal with creditors and the pressures posed by them. It also enables creditors to cancel debts for tax purposes. For this process to be effected, a bankruptcy trustee is appointed to the estate and an executor or administrator can apply to the court under the Act. This also highlights the benefits of having a will stating testamentary intentions. If a person dies without having made a will, it has to be decided who has the right to administer the estate before the estate can be ordered bankrupt. This is an unnecessary roadblock on the highway to relief- another reason for having a valid will in place.
If you would like help with respect to bankruptcy, wills and estates, please contact one of our experienced wills and estates lawyers by clicking here to submit an online enquiry form, calling us on 1300 QUINNS or alternatively, +61 2 9223 9166 to arrange a teleconference or appointment.