Renouncing an insolvent estate
Protect yourself from inherited debts!
Losing a loved one is always difficult in itself. If you then inherit an estate riddled with debt, the burden becomes even heavier. Before accepting an estate, ensure that you fully understand your rights and your options. A Licensed Insolvency Trustee can help you analyze your situation and determine the best solution.
When should you consider renouncing an estate?
Have you inherited an estate with debts that exceed the value of its assets? This is known as an “insolvent estate.” This means that even if you liquidated all of the assets (cash in bank accounts, investments, RRSP, home, etc.), you would not be able to reimburse the creditors in full. You would then be responsible for all the debts inherited from your loved one.
In this case, you could consider renouncing the estate or having the estate declare bankruptcy.
To summarize, here are the situations where you should renounce an estate:
- The estate is insolvent and you don’t want to pay the related debts;
- You’re prepared to renounce the assets included in the insolvent estate.
In this case, you should quickly contact a notary since you must renounce an estate no later than six months after the death.
What should you do with an insolvent estate?
Here are the steps you should follow in the event of an insolvent estate:
- Assess the situation : List the assets and debts left behind by the deceased person.
- Consult an expert : Trustees are professionals who specialize in insolvency. They can help you find the best solution.
- Have the estate declare bankruptcy : If the estate’s debts exceed the value of its assets, you can have the estate declare bankruptcy. As a result, the heirs and liquidator will be released of any personal liability.
- Renounce the estate : In certain cases, contacting a notary and renouncing the estate is preferable.
- Don’t make a hasty decision : With the help of a trustee, weigh the pros and cons so you can make an informed decision.
- Protect your finances : Reach out to competent professionals. They will guide you and ensure the estate will not affect your financial situation.
Please feel free to contact us. We can determine the best options for your situation.
What are the advantages of having an estate declare bankruptcy?
Contact a notary as soon as possible. In Quebec, renouncing an estate must be signed and published in the presence of a notary. The notary can support you through the entire process and explain the legal implications and related costs. They will then prepare the document of resignation, relinquishment and abandonment that you must sign in their presence. Benefitting from the advice of a professional is an essential element of understanding the impact of your decision and avoiding errors.
How can a Licensed Insolvency Trustee help you with an insolvent estate?
A trustee can play a vital role in the event of an insolvent estate, They can:
- Assess the estate’s financial situation to determine whether it is actually insolvent;
- Advise you regarding the various solutions such as renouncing an estate or having an estate declare bankruptcy;
- Handle the estate bankruptcy process by managing creditors and ensuring that debts are settled in accordance with the law;
- Protect the heirs and the liquidator and ensure they’re released of any personal liability;
- Reduce your stress so you can process your grief in peace.
Other solutions that can help
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Consumer proposal
This is an excellent alternative to bankruptcy. We negotiate an agreement with your creditors to reduce your debts and/or spread out your repayments over a longer period. Our Licensed Insolvency Trustees will take care of everything.
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Personal bankruptcy
Personal bankruptcy might be the solution you need to eliminate your debts and get a fresh start. We can guide you through every step.
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Debt consolidation
Consolidate all your debts into a single payment to simplify your financial management and protect your credit score.
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Voluntary deposit
You commit to paying a percentage of your income to the court every month until you’ve paid off all your debts. This is an excellent solution for avoiding bankruptcy!