54.1 Introduction

This chapter provides guidance to the official receiver when dealing with a personal insolvency where the debtor has died before or after the petition for bankruptcy has been presented. The debts a person owes when he/she dies are not discharged on death (unless specific provision has been made, e.g. the debts are insured.) Any debts owed by the deceased debtor remain to be paid by his/her estate. Where a debtor dies before an bankruptcy petition is presented, a petition will be presented for an insolvency administration order and not a petition for bankruptcy (see Part 1.) Where a debtor dies after a bankruptcy petition is presented, a bankruptcy order is made and the proceedings in the matter are continued as if the debtor were alive, with some modifications (See Part 2.)

The Administration of Insolvent Estates of Deceased Persons Order 1986 (AIEDPO86) extends and modifies the provisions of the Insolvency Act 1986 to the administration in bankruptcy of insolvency estates of deceased persons. It also contains provisions regarding the administration of insolvent estates of deceased persons otherwise than in bankruptcy, but these are not dealt with in this chapter.

The Chapter is divided into three parts as follows:

Part 1 - Debtor dying prior to the presentation of the bankruptcy petition (paragraphs 54.2 - 54.33 )

Part 2 - Debtor dying after the bankruptcy petition is presented (paragraphs 54.34 - 54.41)

Part 3 - Locating the deceased debtor's personal representative (paragraphs 54.42 - 54.45)

The following abbreviations are used in this chapter:

AIEDPO86 - Administration of Insolvent Estates of Deceased Persons Order 1986

Frequently asked questions

Q. Are funeral expenses payable from the insolvent estate?

A. Yes. Funeral and testamentary expenses have priority over the deceased debtor's preferential debts both where the deceased debtor dies before a bankruptcy petition is presented and where the deceased debtor dies at any time after a bankruptcy petition is presented. For details see paragraphs 54.19, 54.35 and 54.36.

Q. Does property owned under a joint tenancy vest in the trustee?

A. Where a debtor dies before a bankruptcy petition is presented, the interest held by the debtor prior to his/her death in a property under a joint tenancy passes on death to the surviving joint tenant(s) and does not vest in the trustee. The value that was lost to the insolvency estate may be recoverable under s421A. See paragraph 54.30 for details.

Where a debtor dies after the presentation of a bankruptcy petition but before a bankruptcy order is made, the interest held by the debtor prior to his/her death in a property under a joint tenancy passes on death to the surviving joint tenant(s) and does not vest in the trustee. The value lost to the estate cannot be recovered. See paragraph 54.39 for details.

Where a debtor dies after a bankruptcy order is made, the interest held by the debtor in a property under a joint tenancy vests in the trustee on the making of the bankruptcy order, and therefore cannot be passed to the surviving joint tenant(s) on the death of the debtor. See paragraph 54.39 for details.