Source: https://lundinonchapter13.com/Home/DisplaySectionContent?sectionNumber=128.1
Timestamp: 2019-07-16 01:55:25
Document Index: 343015265

Matched Legal Cases: ['§ 128', '§ 1325', '§ 1328', '§ 1307', '§ 302', '§ 1325', '§ 1328', '§ 7', '§ 10', '§ 7', '§ 10', '§ 198', '§ 111', '§ 265', '§ 127', '§ 160', '§ 7', '§ 10', '§ 160', '§ 348', '§ 314', '§ 142', '§ 158', '§ 541', '§ 109', '§ 5', '§ 9', '§ 10', '§ 10', '§ 11', '§ 255', '§ 126', '§ 91', '§ 46', '§ 90', '§ 90', '§ 126', '§ 126', '§ 160', '§ 7', '§ 10', '§ 10', '§ 7', '§ 10', '§ 1328', '§ 1328', '§ 1307', '§ 109', '§ 1328', '§ 1328', '§ 1328', '§ 1328', '§ 1328', '§ 101', '§ 1328', '§ 1328', '§ 1328', '§ 1328', '§ 1328', '§ 522', '§ 1328', '§ 1328', '§ 1328', '§ 707', '§ 548']

128.1 - Death or Incompetency of Debtor
§ 128.1 — Death or Incompetency of Debtor
Revised: June 9, 2004
Bankruptcy Rule 1016 provides that the death or incompetency of a Chapter 13 debtor does not automatically end the case, but “the case may be dismissed; or if further administration is possible and in the best interest of the parties, the case may proceed and be concluded in the same manner, so far as possible, as though the death or incompetency had not occurred.”1 As amended, effective December 1, 2002, Bankruptcy Rule 1004.1 provides, “The court shall appoint a guardian ad litem for an infant or incompetent person who is a debtor and is not otherwise represented or shall make any other order to protect the infant or incompetent debtor.”2
The death or incapacity of a wage-earning debtor typically marks the end of the Chapter 13 case because there is no longer a source for funding the plan. If death or incapacity occurs before confirmation, it may be difficult or impossible to prove the conditions for confirmation—for example, that the debtor will be able to make the payments called for by the plan as required by the feasibility test in § 1325(a)(6).3 However, death or incapacity of the debtor after confirmation might be a ground for postconfirmation modification of the plan to reduce payments to creditors4 or for a hardship discharge under § 1328(b).5
Before dismissing a Chapter 13 case at the death of the debtor after confirmation, counsel should investigate whether administration of the decedent’s estate is best accomplished under state law or through completion of the Chapter 13 case.6 When the debtor experienced substantial postconfirmation medical bills during a last illness, management of those debts by conversion to Chapter 7 may be advantageous to heirs or other parties in interest.7
Imagine, for example, a Chapter 13 debtor with substantial unsecured debts and a $50,000 life insurance policy with no cash value. Assume that the debtor dies after confirmation and more than 180 days after the petition.8 The heirs of the debtor who stand to inherit the $50,000 insurance proceeds want to maximize the discharge of debt in the Chapter 13 case. A hardship discharge in the Chapter 13 case or conversion to Chapter 7 might accomplish discharge of the prepetition debt. State descent and distribution law might subject some or all of the insurance proceeds to the claims of creditors.
One reported decision seems to hold that the bankruptcy court is without discretion to do anything but dismiss a Chapter 13 case when the debtor dies before confirmation of a plan. In In re Spiser,9 both debtors in a joint Chapter 13 case died after the meeting of creditors but before confirmation of a plan. The deceased debtors’ attorney converted the case to Chapter 7 and sought to avoid liens on the debtors’ homestead in the Chapter 7 case. The Chapter 7 trustee moved to vacate the order of conversion and to dismiss the Chapter 7 case.
The bankruptcy court acknowledged that Bankruptcy Rule 1016 provides that the death of a Chapter 13 debtor does not automatically abate administration of the case. But because only an individual with regular income may be a debtor in a Chapter 13 case,10 “with the deaths of both Mr. and Mrs. Spiser, there was no ‘individual’ remaining in the Chapter 13 case; only the probate estates of Mr. and Mrs. Spiser remained. A probate estate is not a ‘debtor’ eligible to convert the case to Chapter 7 under § 1307(a).”11 The court vacated the order of conversion and then dismissed the Chapter 13 case because no individual remained to act as the debtor or to generate income to fund a plan. The court read Bankruptcy Rule 1016 to support this outcome:
That rule provides that in the event of the death of a chapter 13 debtor the case may be dismissed or, if further administration is possible, the case may be concluded in the same manner as though the death had not occurred. The term “further administration” implies that the case would be carried to its normal conclusion with payments to the creditors as provided in the confirmed plan, rather than conversion of the case to Chapter 7.12
Parts of the Spiser opinion can be read to preclude eligibility for Chapter 13 relief upon the death of all of the debtors. Other parts of Spiser analyze whether the Chapter 13 case can continue based on whether the decedents’ estates could fund a Chapter 13 plan. Spiser extends ambiguously to the issue (not before the court) whether a Chapter 13 case could continue if the debtors died after confirmation.
Spiser should be contrasted with the situation where one spouse dies during a joint Chapter 13 case. In In re Estrada,13 one spouse in a joint Chapter 7 case was permitted to separately convert to Chapter 13. The surviving spouse’s Chapter 7 case was never substantively consolidated with the deceased spouse’s case under § 302(b) of the Code. The surviving spouse had substantial separate assets as the beneficiary of life insurance policies on her now deceased spouse. Conversion from Chapter 7 to Chapter 13 permitted the surviving spouse to manage her separate debts and her separate assets, leaving her deceased spouse’s separate debts to be discharged in the Chapter 7 case.
One reported decision refused a surviving spouse’s effort to cash out a joint Chapter 13 plan using the proceeds of life insurance. In In re Guentert,14 one debtor died approximately 23 months into the Chapter 13 case. The confirmed plan called for 45 percent payment of unsecured claims. The surviving spouse received life insurance proceeds and moved to modify to pay off the 45 percent plan with a lump-sum portion of the life insurance proceeds. The bankruptcy court sustained the trustee’s objection on the ground that the modified plan had to satisfy the disposable income test in § 1325(b)15 and thus the surviving spouse had to continue making payments for at least three years or pay 100 percent of unsecured claims.16 The court noted that the life insurance proceeds became property of the surviving spouse’s Chapter 13 estate and further hearing would be necessary to determine whether the debtor could exempt all or any portion of those proceeds.17 The court observed that the only way for the surviving spouse to complete the plan short of 100 percent payment or 36 months would be to qualify for hardship discharge under § 1328(b).18
Controversies among executors, legatees and devisees have surfaced in reported Chapter 13 cases. In Querner v. Querner (In re Querner),19 the U.S. Court of Appeals for the Fifth Circuit held that a bankruptcy court correctly exercised its discretion under Bankruptcy Rule 1016 to continue jurisdiction over a Chapter 13 debtor’s property after the debtor’s death; however, the bankruptcy court improperly exercised jurisdiction over the probate estate of the deceased debtor after the Chapter 13 case was closed. Querner involved a dispute between the co-executors of a deceased Chapter 13 debtor’s probate estate. The Fifth Circuit held that this dispute, after the closing of the Chapter 13 case, was best resolved by a state probate court, not by the bankruptcy court.
In In re Kjellsen,20 the bankruptcy court had to resolve which competing fiduciary representative of an incompetent debtor had authority to file a Chapter 13 case. The Chapter 13 petition was signed by an incompetent debtor and by the debtor’s daughter acting under a durable power of attorney that had been partially revoked by a state court. The debtor was also represented by a guardian appointed by that state court. The state court revoked the portion of the daughter’s power of attorney that dealt with control of the debtor’s property. Responsibility for the debtor’s property was vested in the separate guardian.
The bankruptcy court found that revocation of the daughter’s control of the debtor’s property did not upset the daughter’s authority “to continue acting as Debtor’s personal caretaker and to make personal decisions on Debtor’s behalf.”21 The court held that bankruptcy was a “personal action” that the daughter could undertake on behalf of the debtor pursuant to the durable power of attorney, notwithstanding the limitations ordered by the state court in favor of the separate guardian.
Kjellsen demonstrates that bankruptcy courts will be drawn into the traditional sphere of state probate courts at least to determine whether guardians, conservators, “next friends,” and family members have authority to commence or continue a Chapter 13 case on behalf of a deceased or incompetent debtor.22 Querner indicates there are limits on this intrusion.
It is too early to tell what effect the 2002 amendments to Bankruptcy Rule 1004.1 will have on the administration of Chapter 13 cases when the debtor becomes incompetent during the case. New Bankruptcy Rule 1004.1 seems to mandate that the bankruptcy court appoint a guardian ad litem for a Chapter 13 debtor who becomes incompetent during the case and is “not otherwise represented.”23 The Rule might be interpreted as some encouragement to continue the administration of Chapter 13 cases when the debtor becomes incompetent. Because Rule 1004.1 is derived from Rule 17 of the Federal Rules of Civil Procedure, bankruptcy courts can be expected to look to cases interpreting Rule 17(c) for guidance with respect to what a guardian ad litem can do in a Chapter 13 case on behalf of an incompetent debtor.
1 Fed. R. Bankr. P. 1016. For discussion of eligibility of a decedent’s estate, see § 7.8 [ Eligibility of a Decedent’s Estate ] § 10.8 Eligibility of a Decedent’s Estate. For discussion of eligibility of an incompetent, see § 7.9 [ Eligibility of an Incompetent and Petitions on Behalf of Others ] § 10.9 Petitions on Behalf of Others: Incompetents, Next Friends, Powers of Attorney and the Like.
2 Fed. R. Bankr. P. 1004.1.
3 See § 198.1 [ Able to Make Payments and Comply with Plan ] § 111.1 Able to Make Payments and Comply with Plan.
4 See § 265.1 [ To Decrease Payments to Creditors ] § 127.8 To Decrease Payments to Creditors. See, e.g., In re Baker, 194 B.R. 881 (Bankr. S.D. Cal. 1996) (Debtor permitted to modify plan after confirmation to reduce payments to unsecured creditors from 100% to 25% where codebtor spouse passed away.).
5 See discussion of hardship discharge beginning at § 160.1 In General.
6 See also §§ 7.8 [ Eligibility of a Decedent’s Estate ] § 10.8 Eligibility of a Decedent’s Estate and 353.1 [ Circumstances for Which the Debtor Should Not Justly Be Held Accountable ] § 160.3 Circumstances for Which the Debtor Should Not Justly Be Held Accountable.
7 11 U.S.C. § 348(d) provides that, upon conversion from Chapter 13 to Chapter 7, claims that “arise after the order for relief but before conversion . . . shall be treated for all purposes as if such claim had arisen immediately before the date of the filing of the petition.” Trapping postpetition medical bills in the Chapter 7 case could relieve the decedent’s estate from responsibility for those expenses. See §§ 314.1 [ On Postpetition Claims ] § 142.5 On Postpetition Claims and 350.1 [ Postpetition Claims ] § 158.6 Postpetition Claims.
8 See 11 U.S.C. § 541(a)(5).
9 232 B.R. 669 (Bankr. N.D. Tex. 1999).
10 11 U.S.C. § 109(e), discussed in §§ 5.1 [ Summary of Eligibility Requirements ] § 9.1 Summary of Eligibility Requirements, 7.1 [ Debtor Must Be an Individual ] § 10.1 Debtor Must Be an Individual; Spouses Allowed, 7.8 [ Eligibility of a Decedent’s Estate ] § 10.8 Eligibility of a Decedent’s Estate and 8.2 [ When Must Debtor Have Regular Income? ] § 11.2 When Must Debtor Have Regular Income?.
11 232 B.R. at 673.
12 232 B.R. at 673.
13 224 B.R. 132 (Bankr. S.D. Cal. 1998).
14 206 B.R. 958 (Bankr. W.D. Mo. 1997).
15 A controversial holding. See § 255.1 [ Does Disposable Income Test Apply? ] § 126.3 Does Disposable Income Test Apply?.
16 See discussion of disposable income test before BAPCPA beginning at § 91.1 In General.
17 See § 46.10 Insurance Policies and Proceeds, § 90.2 Exemption Issues, § 90.3 Exclusions and Exemptions after BAPCPA, § 126.2 Application of Tests for Confirmation and § 126.6 Modification after Confirmation after BAPCPA.
18 See discussion of hardship discharge beginning at § 160.1 In General.
19 7 F.3d 1199 (5th Cir. 1993).
20 155 B.R. 1013 (Bankr. D.S.D. 1993).
21 155 B.R. at 1021.
22 See also §§ 7.8 [ Eligibility of a Decedent’s Estate ] § 10.8 Eligibility of a Decedent’s Estate and 7.9 [ Eligibility of an Incompetent and Petitions on Behalf of Others ] § 10.9 Petitions on Behalf of Others: Incompetents, Next Friends, Powers of Attorney and the Like.
23 See § 7.9 [ Eligibility of an Incompetent and Petitions on Behalf of Others ] § 10.9 Petitions on Behalf of Others: Incompetents, Next Friends, Powers of Attorney and the Like.
Hamilton v. Appolon (In re Hamilton), 399 B.R. 717 (B.A.P. 1st Cir. Jan. 21, 2009) (Haines, Kornreich, Tester) (Dismissal of complaint filed by deceased debtor's daughter for failure to prove qualification as administratrix within 30-day deadline was abuse of discretion; bankruptcy court failed to warn daughter that missing deadline might result in dismissal. Remand is ordered for bankruptcy court to determine whether it should retain jurisdiction over complaint or dismiss without prejudice to permit daughter to pursue action in another court.), on remand 2009 WL 2171097 (Bankr. D. Mass. July 15, 2009) (On remand, judicial economy, convenience to parties, fairness and comity support dismissal without prejudice of adversary proceeding by deceased debtor's daughter to permit parties to pursue litigation in state court.).
In re Fogel, No. 14-cv-01851-PAB, 2015 WL 5032055, at *2-*3 (D. Colo. Aug. 26, 2015) (Brimmer) (Death after confirmation does not mandate dismissal of Chapter 13 case when surviving spouse is appointed personal representative and completes payments; surviving spouse is appropriate person to complete case notwithstanding that she will benefit personally from completion of payments. "While a Chapter 13 case 'may be dismissed' upon the death of the debtor, [Bankruptcy Rule 1016] requires that the bankruptcy court consider whether 'further administration . . . is possible' and whether further administration of the plan is 'in the best interest of the parties.' . . . While the debtor's continued existence may be crucial in cases where the debtor's income is necessary to make plan payments, there may be situations, as this case demonstrates, where a plan can be administered and payments made despite the death of the debtor. . . . [P]ursuant to Federal Rule of Bankruptcy Procedure 1016, an appropriate person may represent a debtor after his or her death."), rev'g and remanding 512 B.R. 659, 662-63 (Bankr. D. Colo. June 23, 2014) (Campbell) (On reconsideration, deceased debtor's personal representative is not the only "interest" that must be considered to determine whether to allow waiver of financial management course requirement for discharge; interests of stripped-off lienholder weigh against allowing completion of requirements for discharge. "[T]he Personal Representative did not inform the Court of the Debtor's death until after she had completed all payments under the plan. The time for the Court to have considered whether continued administration of the case was in the best interests of the parties should have been shortly after Debtor's death. . . . [I]t is clear that a primary goal of the Personal Representative is to achieve the 'strip' of the second deed of trust against the Debtor's residence, a property which may fall to her as a beneficiary in the probate estate. The holder of that second deed of trust against that real property is one of the 'parties' whose interests concern this Court, and which will be preserved if the Court does not set aside its Order."), denying reconsideration of 507 B.R. 734, 734-35 (Bankr. D. Colo. Apr. 1, 2014) (Campbell) (Nonfiling widow's motion to waive financial management course requirement for entry of discharge is denied and case is dismissed when debtor died three years earlier and surviving spouse completed payments under the plan. "[A] Motion to Waive Financial Management Course Requirement . . . is filed purportedly on behalf of the Debtor who by the allegations of the Motion died on February 24, 2011. The Debtor's plan was confirmed a month prior on January 25, 2011. . . . The Motion . . . represents that the Debtor's widow, who is NOT a co-debtor in this case, but who is the Personal Representative of Debtor's probate estate made the payments under the confirmed plan. . . . In the case involving a sole Chapter 13 debtor who dies, . . . the case must be dismissed. The nondebtor spouse cannot simply make the payments under the plan and achieve the benefits of the stay and the discharge without filing a case.").
In re Miller, 526 B.R. 857, 861 (D. Colo. Sept. 23, 2014) (Blackburn) (Hardship discharge under § 1328(b) based on death of debtor did not satisfy "further administration" requirement under Bankruptcy Rule 1016; sua sponte dismissal was appropriate. "The further administration portion of Rule 1016 contemplates the completion and conclusion of the bankruptcy proceeding 'in the same manner, so far as possible, as though the death or incompetency had not occurred.' . . . Absent the employment earnings of [debtor] it was not possible to complete payments under his plan. . . . [F]urther administration must be 'in the best interest of the parties. . . .' . . . [N]o showing [was made] that a hardship discharge would be in the best interest of the parties to the bankruptcy case. . . . Section 1328(b) provides that the court 'may' grant a discharge if the specified circumstances are shown. . . . [T]he grant of such a discharge is within the discretion of the court. The bankruptcy court found . . . that granting a discharge to benefit a spouse who is not a party to the bankruptcy proceedings or, possibly, creditors of the probate estate of the debtor, was not proper. . . . [T]his determination was well within the discretion granted to the court under § 1328(b).").
In re Marks, 595 B.R. 881 (Bankr. E.D. Mich. Jan. 24, 2019) (Tucker) (Applying Bankruptcy Rule 1016, when Chapter 13 debtor died and personal representative withdrew motion to be allowed to continue administration of the case, bankruptcy court had no choice but to dismiss.).
Thompson v. Seterus, Inc. (In re Thompson), No. 17-00058-NPO, 2018 WL 5815982 (Bankr. S.D. Miss. Nov. 5, 2018) (Olack) (In litigation between Chapter 13 debtor, former spouse and mortgage servicer with respect to insurance proceeds from postconfirmation destruction of wood shop, summary judgment is inappropriate because debtor died, servicer did not identify or serve successor in interest and duties of servicer can’t be determined without a representative of the deceased debtor.).
In re Moore, No. 15-62639, 2017 WL 4417582, at *2 (Bankr. N.D. Ohio Oct. 3, 2017) (Kendig) (When Chapter 13 debtor dies after confirmation and surviving codebtor voluntarily converts to Chapter 7, court sua sponte severs deceased debtor’s case and denies conversion because deceased debtor is not eligible to be debtor in Chapter 7 case. “§ 1307(g) states that a chapter 13 debtor can convert to chapter 7 only if the debtor is eligible to be a debtor under chapter 7. Since a decedent’s estate is not a ‘person’ for § 109(b) purposes, a probate estate cannot be a chapter 7 debtor. . . . The court is aware of, and disagrees with, case law that looks at a debtor’s eligibility at the time of filing. [In re Perkins, 381 B.R. 530 (Bankr. S.D. Ill. Nov. 21, 2007) (Altenberger)] . . . . [T]he debtor must meet the eligibility requirements at the time of the conversion. . . . [A] deceased debtor does not need the benefit of a fresh start, one of the principal purposes of a bankruptcy discharge.”).
In re Inyard, 532 B.R. 364 (Bankr. D. Kan. June 17, 2015) (Karlin) (Deceased debtor is eligible for hardship discharge, and a hardship discharge is appropriate on motion of administrator of decedent's estate.).
In re Conn, No. 13-62278, 2015 WL 3777958, at *3 (Bankr. N.D. Ohio June 12, 2015) (unpublished) (Kendig) (Deceased debtor gets hardship discharge when conditions in § 1328(b) are satisfied, creditors will be no worse off, surviving spouse achieves no particular advantage and no creditors filed claims against probate estate. There is no dispute that three conditions in § 1328(b) were satisfied. Trustee objected to hardship discharge based on Bankruptcy Rule 1016. "The secured creditors have liens in place that will be unaffected by the discharge. The unsecured creditors have not opposed either the hardship discharge or filed claims in the probate case, leaving them no avenue for recovery. Consequently, the court finds no reason to deny Debtor an opportunity to obtain a hardship discharge.").
In re Lizzi, Nos. 09-10097, 10-13875, 2015 WL 1576513 (Bankr. N.D.N.Y. Apr. 3, 2015) (Littlefield) (Deceased debtor is eligible for hardship discharge upon satisfaction of § 1328(b) requirements. Section 1328(g)(1) requirement can be waived for a deceased debtor. Sections 522(q) and 1328(f) and (h) requirements can be satisfied by representative with personal knowledge.).
In re Hoover, No. 09-71464, 2015 WL 1407241, at *1-*2 (Bankr. N.D. Cal. Mar. 24, 2015) (Lafferty) (Applying Bankruptcy Rule 1016 and § 1328(b), hardship discharge is appropriate for debtor who died one payment short of completing five-year plan. "No provision of the Bankruptcy Code deals with how a case should proceed when the debtor dies during the case. . . . However, the death of a debtor is addressed in Rule 1016. . . . In the case of a deceased debtor, further administration of the case can encompass a hardship discharge when the equities in the case so merit, and when the requirements of § 1328(b) are met.").
In re Kosinski, No. 10 bk 28949, 2015 WL 1177691, at *3-*4 (Bankr. N.D. Ill. Mar. 5, 2015) (Doyle) (Applying Bankruptcy Rule 1016, hardship discharge is appropriate when debtor died five payments from end of 60-month plan and surviving spouse can act as personal representative of the decedent. "Rule 1016 permits a case to continue despite the death of the debtor without the formal substitution of another party for the debtor. . . . While many courts have held that probate estates are not 'persons' eligible to file a bankruptcy petition under §§ 101(4) and 109(g) of the Bankruptcy Code, these cases do not support the trustee's argument that a living person who was eligible to file a bankruptcy petition on the petition date cannot be granted a hardship discharge after he dies.").
In re Ferguson, No. 11-50950-CAG, 2015 WL 4131596, at *2-*3 (Bankr. W.D. Tex. Feb. 24, 2015) (Gargotta) (Deceased debtor gets hardship discharge. Modification is not practicable. Death is not a circumstance for which debtor is justly held accountable. After deduction of administrative expenses in a hypothetical Chapter 7 case—including Chapter 13 attorney's fees and Chapter 7 trustee's fees—debtor satisfies liquidation analysis. "Rule 1016 specifically contemplates that a discharge could be granted in a case where the debtor is deceased because it allows for a case to be 'concluded' as though the death has not occurred. . . . For the purposes of a hypothetical liquidation, after valuing all assets that would be available in a Chapter 7 case, it is appropriate to deduct the costs of liquidation, including trustee's fees and other administrative expenses.").
In re Wilson, No. 13-60059, 2014 WL 6747101, at *2 (Bankr. N.D. Ohio Nov. 26, 2014) (Kendig) (Because death of one spouse in a joint case does not necessarily abate the case under Bankruptcy Rule 1016, Chapter 13 trustee appropriately continued distributions notwithstanding that surviving spouse's case was severed and converted to Chapter 7. Surviving spouse could not compel trustee to recover monies paid to creditors when surviving spouse took no action to terminate or modify deceased debtor's case. "Trustee is the more innocent party . . . . [S]he distributed the funds as directed under the plan. . . . [F]urther administration of a chapter 13 case is possible pursuant to Federal Rule of Bankruptcy Procedure 1016. How is Trustee to know whether [the surviving spouse] wants to continue paying on arrearage claim or secured car claim in order to retain an asset? Or whether, for example, she intends to maintain payments to obtain the benefit of a discharge for probate purposes? Trustee omniscience is required by neither the bankruptcy code nor the Office of the United States Trustee.").
In re Faidley, No. 11-60477, 2014 WL 4925886, at *2 (Bankr. N.D. Ohio Sept. 29, 2014) (unpublished) (Kendig) (When debtor passed away before completion of confirmed plan, administrator of estate permitted to complete payments. "[W]hen a chapter 13 debtor passes away in the midst of a chapter 13 plan, if continuing the case is in the best interest of the parties, the case will proceed as closely as possible 'as though the death . . . had not occurred.' Fed. R. Bankr.P. 1016. [The administrator of debtor's estate] informed the court that she intended to complete Debtor's plan, and no objections were filed. The court will administer the case as if Debtor had not passed away.").
In re Levy, No. 11-60130, 2014 WL 1323165, at *2-*4 (Bankr. N.D. Ohio Mar. 31, 2014) (unpublished) (Kendig) (Consistent with Bankruptcy Rule 1016, surviving joint debtor who completed payments under confirmed plan may act on behalf of deceased debtor to complete § 1328(a) and (h) certifications required for discharge. "Often, 'further administration' is unlikely in a chapter 13 case because payments depend on income from the debtor. . . . [However], Rule 1016 supports continuation of a case when circumstances permit. . . . Only two documents now stand between the deceased debtor and a discharge: the certifications regarding DSO obligations and § 1328(h). . . . In order to determine whether a debtor is eligible for a discharge under § 1328(a), the court requires completion of a DSO certification. . . . Parsing the code requirement, the intent is to verify that a debtor who has a DSO obligation has fallen no further behind during the chapter 13 case. . . . In a full compliance chapter 13 case, a DSO is not dischargeable. . . . So, if not paid, a DSO is not affected by entry of a discharge. Consequently, a DSO certification is more form than substance. . . . [T]here is a stark distinction between an action that can alter liability on a debt versus one which cannot. Since the § 1328(a) certification appears to fall under the latter category, the court finds no reason that the DSO certification requirement cannot be undertaken by another in appropriate circumstances. The requirement therefore does not impede 'further administration' contemplated under Rule 1016. . . . [T]he court reaches the same conclusion about § 1328(h), albeit along slightly divergent reasoning. First, the certification requirement arises from the court's local rule implementing this section of the bankruptcy code, not from a specific code demand. The certification process was simply the mechanism employed by the court to assure its authority to enter a discharge. In Ohio, the section generally will not apply because Ohio's homestead exemption amount falls below the threshold amount set forth in § 522(q)(1). . . . Only debtors who could rely on larger residential real estate exemptions from other states would possibly be impacted by § 1328(h). . . . Considering the limited number of cases which are likely to be affected, coupled with the fact that the certification procedure was developed by the court and not required under the code, the court again finds no reason to rigorously adhere to the certification procedure used by the court to meet § 1328(h)'s requirements in a case when a debtor passed away. Therefore, the court will permit another person to submit a § 1328(h) certificate on behalf of a deceased debtor under appropriate circumstances. . . . Under Rule 1016, the mere fact that further administration was possible, and may be accomplished through other procedures, is not the only inquiry to be made when considering whether to allow a case to proceed. A court must also consider the best interest of the parties. . . . To make the determination, the court will require the person seeking to sign end of case documents on behalf of a deceased debtor to file a motion, and properly serve and notice it, setting forth the following: (1) whether there is a probate estate, whether the creation of a probate estate is expected and, if not, why; (2) the identification of the party seeking to act, his or her relationship to the debtor, and a foundation for his/her personal knowledge, all set forth in an affidavit; and (3) acceptable proof of death, such as a copy of a death certificate.").
In re Hennessy, No. 11-13793, 2013 WL 3939886, at *2 (Bankr. N.D. Cal. July 29, 2013) (Jaroslovsky) (Death of debtor was cause for dismissal. Bankruptcy Rule 1016 provides only two options when a Chapter 13 debtor dies—dismissal or continuation of the plan as if the debtor had not died. "[A] Chapter 13 debtor who dies does not need a fresh start, payment of creditors of a deceased debtor should be accomplished through the probate process . . . and, in any event, the right to seek a bankruptcy discharge is personal to the debtor and may not be exercised by the probate estate.").
In re Shepherd, 490 B.R. 338 (Bankr. N.D. Ind. Mar. 28, 2013) (Grant) (On death of debtor, probate estate representative could not be substituted as petitioner to modify or complete plan. Bankruptcy Rule 1016 provides that dismissal is not necessarily required on debtor's death, but it does not provide for substitution of probate representative. Probate estate cannot file bankruptcy directly and is not permitted to do so indirectly by substitution.).
In re Rodriguez, 488 B.R. 675 (Bankr. E.D. Cal. Mar. 19, 2013) (Lee) (At death of debtor, trustee paid undistributed funds into court registry; sole heir's motion to withdraw unclaimed funds was denied without prejudice because heir failed to comply with requirements of state law.).
In re Navarro, No. 12-21062PM, 2012 WL 5193743 (Bankr. D. Md. Oct. 19, 2012) (Mannes) (Upon debtor's death, case dismissed because no personal representative had been appointed by state court and schedules indicated estate was insolvent.).
In re Quint, No. 11-04296-jw, 2012 WL 2370095 (Bankr. D.S.C. June 22, 2012) (Waites) (Special administrator appointed by probate court was authorized to administer decedent's estate in pending Chapter 13; request of administrator to convert to Chapter 7 denied without prejudice to future showing that conversion was in best interest of all parties.).
In re Vetter, No. 11-03988-dd, 2012 WL 1597378, at *1-*2 (Bankr. D.S.C. May 7, 2012) (Duncan) (At death of debtor, counsel should have given notice to court and sought designation of representative before converting case to Chapter 7. "Fed. R. Bankr.P. 1016 provides that when a chapter 13 debtor dies, the 'case may be dismissed; or if further administration is possible and in the best interest of the parties, the case may proceed and be concluded in the same manner, so far as possible, as though the death or incompetency had not occurred.' Rule 1016 further provides that in a chapter 7 context, the death of a debtor 'shall not abate a liquidation case' and that the case, so far as possible, should continue as if the death had not occurred. Although the debtor died during the chapter 13 portion of the case following confirmation of the debtor's plan, the debtor's counsel made no request to the Court for the debtor's personal probate estate representative to assume debtor's duties under the Bankruptcy Code. It further appears that creditors, the chapter 13 trustee, and other parties in interest were not provided notice of the debtor's death. . . . Rules 1016 and 1017(f) do not permit the debtor's chapter 13 case to be converted to one under chapter 7 under the facts of this case. . . . The Court recognizes that a chapter 7 or chapter 13 case could be at the stage where notice of the debtor's death and recognition of the authority of a personal representative would be less important than in this case. However, in most cases pleadings, amended schedules, reports, or an amended plan may be required. Parties in interest may well have service of process questions. Counsel for a deceased debtor needs direction concerning the authority of another party to act for the debtor. Finally, creditors and parties in interest may need to reevaluate their positions in a case based upon a debtor's death such as deciding whether to prosecute a motion for stay relief or a discharge or dischargeability action or a motion to dismiss or to convert a case to another chapter. For these reasons, upon the death of a debtor, counsel for a deceased debtor should ordinarily promptly notify the Court of the debtor's death and file a motion for designation of an appropriate person to act on the debtor's behalf. The failure of the debtor's counsel to take these actions in this case and his failure to respond to the motion to dismiss constitute cause for dismissal of this case. § 707(a).").
In re Redwine, No. 09-84032-JB, 2011 WL 1116783 (Bankr. N.D. Ga. Mar. 8, 2011) (Bihary) (Hardship discharge was granted when debtor died after confirmation. Failure to complete payments was due to circumstances for which debtor could not be held accountable. Value of property distributed under plan to unsecured creditors was not less than amount creditors would have received in Chapter 7 liquidation. Modification of plan was not practicable. Under Bankruptcy Rule 1016, further administration was appropriate upon death of debtor.).
In re Fuller, No. 05-18831 HRT, 2010 WL 1463150 (Bankr. D. Colo. Mar. 11, 2010) (Tallman) (When one joint debtor died but case administration was allowed to continue and surviving debtor completed payments, deceased debtor is entitled to a discharge.).
In re Langley, No. 05-61279, 2009 WL 5227665 (Bankr. S.D. Ga. Sept. 28, 2009) (Dalis) (After death of both debtors, continued administration of case was not in best interests of all parties since it would interfere with probate administration; debtors' daughter was not party to Chapter 13 case and lacked standing to seek continued administration.).
Devoe v. Harris (In re Devoe), Nos. 05 B 21479, 07 A 00657, 2007 WL 4374189 (Bankr. N.D. Ill. Dec. 12, 2007) (Squires) (Upon debtor's postconfirmation death, probate administrator's adversary proceeding to avoid fraudulent postpetition transfer is not covered by § 548, and under Illinois law, decedent's estate lacks capacity to sue.).
In re Stewart, No. 01-66434-FRA13, 2004 WL 3310532 (Bankr. D. Or. Mar. 2, 2004) (unpublished) (When debtor died after confirmation, heirs can continue administration of estate and make remaining plan payments; personal representative appointed by state court is substituted for debtor.).