Deceased’s insolvent estates

Please note that this information relates to England and Wales only, there may be different procedures applicable in respect of insolvent estates in Scotland and Northern Ireland.

If it becomes apparent after a person has died that the assets of their estate are insufficient to meet their outstanding liabilities, then the estate could potentially be insolvent. It is possible to deal with an insolvent estate informally if the debts are small. Great care, however, needs to be taken as there is a risk that the personal representative could be held personally liable if correct procedures are not followed.

How MGA can help

  • MGA can assist in ascertaining whether an estate is in fact insolvent and can prepare a Statement of Affairs in the prescribed form.
  • Not all personal representatives will understand the insolvency legislation to deal with creditors. MGA can alleviate this burden and pressure during what is already an extremely difficult time.
  • Instructing MGA as soon as possible will minimise any potential liability to the personal representative in respect of payments already made or costs incurred.
  • MGA can take appointments generated by the Insolvency Service or MGA can act on behalf of a personal representative through an Insolvency Administration Order.
  • MGA acting as a Trustee of an insolvent estate are offered protection from personal liability which is not available to personal representatives acting alone.
  • The assets of the estate may well include the matrimonial home. As trustee, MGA will consider the rights of the surviving spouse and find a considerate and economic resolution to realise the creditors’ interests, especially where there are children and other dependents involved.

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