Chicago, IL asked in Bankruptcy, Estate Planning and Probate for Illinois

Q: My mom passed away I have her house in probate can I file bankruptcy

Or do I have to assume the loan first

1 Lawyer Answer
Bryan R. Bagdady
Bryan R. Bagdady
Answered
  • Bankruptcy Lawyer
  • Oakbrook Terrace, IL
  • Licensed in Illinois

A: A debtor's assets in bankruptcy include property received by bequest, devise or inheritance. Please review section 541 of the bankruptcy code before making any decisions. If you are inheriting the house and there is equity, you need to analyze how that equity is treated if you file for bankruptcy relief. As for the loan, that obligation should be secured by a properly filed security instrument. The debt will be satisfied at the time the house is sold since the property should be subject to a bona fide security instrument.

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