You inherit but have debts? Find out how foreclosure interferes with inheritance

How does the executor find out about the inheritance?

The question of how the executor will find out about the inheritance worries many debtors who are struggling with insolvency or execution and have currently inherited some property. And we must point out that this question is entirely appropriate, because if you are in foreclosure and acquire property, the executor has the right to use that property to pay off your debts.

We will therefore say at the outset that you will not hide the inherited property from the executor. Executors have access to various sources of information about debtors’ assets, which includes inheritances. In general, an executor will find out about an inheritance in one of the following ways.

Central population register

Executors have access to the Central Register of Residents, which is a database that records the personal details of individuals, including changes in their assets. When there is a change in your property status (for example, when you inherit property), this information can also reach the executors.

Court proceedings

If the succession proceedings take place in court, it also involves finding out all the assets of the deceased. In this way, the executors can find out that the debtor has inherited property and that it can be used to pay debts.

Notarial proceedings

If you, as an heir, are in insolvency or have an execution, then the notary who handles the inheritance has a legal obligation to inform all parties involved, including the executor. Thus, the executor will learn about your newly acquired property, for example, from the notary who administers the succession.

Information systems and registers

Executors have access to various publicly available registers and databases that include information on property and changes in ownership. For example, information on insolvency can be found in the Insolvency Register. In addition, they can request information from various institutions that administer property, such as banks or the land registry.

I’m in foreclosure and I’m inheriting: What’s in store for me?

Inheritance if you are in foreclosure can fundamentally complicate your financial situation. In fact, inheriting does not automatically mean you will be better off financially. On the contrary, if you have debts, the inherited assets will most likely be used to pay them. What are the most common scenarios that can occur.

I’m in foreclosure and inherit movable property

Movable property includes items such as a car, furniture, jewelry and other things of value. The executor has the right to foreclose on this property. The inherited movable property can then go to auction to use the funds to pay debts.

I am in execution and inherit immovable property

A house or apartment is considered real property. If you inherit property of an immovable nature, the bailiff may subsequently seize and sell the property, again to raise funds to pay your debts. You are therefore facing a difficult process not only in relation to inheritance but also to the subsequent transfer of the inherited property.

I am in foreclosure and inheriting funds

If you have inherited money or other funds, such as securities, you should expect that the executor will most likely block these funds in your account. The reason is the same as in the previous two situations. Seizure of inherited funds applies to money in cash and in a bank account.

To give you some hope, if you are in a difficult life situation because of a foreclosure, we should also mention a few exceptions. There are certain items that the bailiff cannot touch. These are basic necessities of life, such as household goods that are used to meet basic needs. It is important that you contact an attorney at such times to help you understand what property the bailiff is allowed to seize. They can also advise you on other steps you can take to protect your rights.

In most cases, the inherited property is always auctioned or otherwise disposed of so that the funds can be used to repay at least part of the debts. So if you inherit and the assets do not exceed the value of your debts, you will probably not see a penny of the inheritance.

I’m insolvent: What happens to my inheritance?

Even if you are currently in insolvency and at the same time enter into inheritance proceedings, you are facing a complicated situation. In insolvency, you reach a stage where your debts are so high that you are unable to repay them. Your assets are then administered by an insolvency practitioner. If you inherit any other assets during the insolvency, the procedure may be as follows.

You are obliged to declare that you are inheriting

As soon as you become aware that you have become an heir to an asset and you know that you are insolvent, you have a duty to notify the insolvency practitioner. If you fail to do so and breach this duty, you risk legal consequences. It is the insolvency practitioner who will then decide how to deal with your inherited assets.

The inheritance becomes part of the estate

Once an inheritance has been declared, it becomes part of the so-called estate. The estate is the collection of all your assets that can be used to satisfy creditors. As mentioned, this property is administered by the insolvency practitioner and they have the right to decide what happens to it.

Part of the estate may be preserved

In certain cases, the insolvency practitioner may decide not to include certain parts of the estate. This usually includes, for example, items essential to your livelihood, such as personal belongings or basic household equipment. Don’t underestimate the situation and always remember that it is important to cooperate with the insolvency practitioner as much as possible and to give him all the information you can about the inheritance.

What if I inherit from someone who had debts?

The final question that may come to mind in relation to inheritance and execution is what all can happen if you inherit from someone who has had debts. In fact, an heir’s inheritance and foreclosure can have a major impact on how you decide whether to accept the inherited debt or reject such an inheritance.

The moment you inherit from someone who had debts, you must take into account that part or all of the inheritance may be used to cover them. This will leave you with an estate burdened by foreclosures that you will not see anything from in the end. For example, you may have to deal with how to sell the property in insolvency. In the worst case, the property will not be enough to cover the debts and the obligation to pay them would then pass to you.

So if you are not sure you have a particular inheritance to accept, use what is called an inventory reservation. This means taking an inventory of the assets and debts so that you can determine if the debts exceed the value of the assets. If so, you can reject the inheritance without being liable for debts that exceed the value of the inheritance.

Summary

Inheritance and heir foreclosure, a case of insolvency, are complex areas that require careful consideration of all steps. If you find yourself in a situation where you are dealing with an inheritance, always consult a lawyer to help you clarify and understand the specific issues. In most cases, inherited property is used to cover debts in foreclosure and insolvency cases. Both executors and insolvency practitioners have access to information about your assets, so it is important to act in accordance with the law and inform the relevant authorities in a timely manner.