Insolvent Succession: What To Do To Avoid Inheritance of Debts?

The loss of a loved one is difficult enough in itself without the money issues. If you are facing additional financial problems, use competent professionals to accompany you.

Are you the heir or liquidator of an estate whose debt amount exceeds the value of the assets? We call this type of succession, insolvent. Indeed, even when liquidating all assets (bank accounts, investments, RRSPs, homes, cars, etc.) creditors could not be fully reimbursed.

If this is the case, you must act carefully to avoid inheriting debts. If you simply accept the estate, you will be responsible for all the related debts.


Avoid inheriting debts

Avoid inheriting debts

Several years ago, it was quite rare to encounter cases of insolvent succession, but with the increase in indebtedness among our seniors, this scenario became the reality of many Quebecers. In fact, the age group that experienced the largest increase in bankruptcies between 2012 and 2015 is the 65+ age group. The increase in just three years amounts to + 30.3%. It is not uncommon for a loved one to hide the extent of his financial problems, until the day when it is no longer possible.

If you live in an insolvent estate scenario, consult an authorized insolvency trustee (SAI) at Hester Prynne & Associates so that he or she can clearly explain all your options.

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Your options in the face of an insolvent succession

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Accept the succession

By accepting the estate, you inherit property, but also debts. Caution is needed when there is an ambiguous situation especially if one does not know the complete financial situation of the deceased. Option that is to be avoided because it jeopardizes your own financial situation.


Refuse the succession

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By refusing the estate, you do not inherit debts, but you are not entitled to the assets either.


Put the estate in bankruptcy

The third option offered by a licensed insolvency trustee is to bankrupt the estate and thus settle the debts under the Bankruptcy and Insolvency Act .

In a situation of insolvent succession, this option has several advantages:

  • You are not responsible for the debts of the estate.
  • Eliminate delays (and avoid recourse to curatorship).
  • The trustee is responsible for the entire administration and releases the liquidator from all the hassle connected with the succession (problems with creditors, legal proceedings, etc.).
  • The trustee will not automatically seize all property in the estate. Family memories, religious objects and property with no significant market value will be given to you.
  • The trustee having the seizure of the assets the latter will proceed without delay to the realization of the goods.
  • Advantage of settling cases of undivided assets more quickly.
  • You can offer the trustee to buy the property you want to keep. For example, it would be possible to offer the trustee to buy the residence of the estate or the car that belonged to the deceased.
  • Funeral expenses and other reasonable testamentary expenses will be paid by the trustee, as long as funds are available.
  • The bankruptcy of the estate does not affect the finances or the credit file of the heir or the liquidator.



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Be careful not to accept the estate automatically and by taking actions that may be irreversible towards the liquidator, such as:

  • by appropriating the property of the estate,
  • by transferring bank balances or
  • by not formally renouncing it within the prescribed period of six months.

Make an appointment with a licensed insolvency trustee to find out more. You can consult us without fees, without obligation and in all confidentiality.

Home Loan: Borrowing Without Contribution Thanks to Low Rates

The reduced prices of home loans allow a few borrowers to take out such financial loans without providing a personal share.

In 2016, falling mortgage interest rates gained a good number of borrowers. In the face of in the past low rates, buyers have got responded to the market. The latter provides experienced record activity because the 850, 000 sales tag has been crossed. As a reminder, the prior record peaked at 832, 000 transactions and out dated back to 2006. For its component, during these ten years, the buying power of real estate has grown significantly.


Low prices and rising real estate buying power stimulate the market

Low rates and rising real estate purchasing power stimulate the market

According to industry professionals, the particular increase would be about 30%. That is to say that at identical monthly rate, a debtor of 2016 could declare a larger real estate area is definitely an additional 30 square metres for an initial area of ‚Äč100 m². Last year, the very best borrower profiles were able to take advantage of exceptional financing conditions. Mortgage loans have even been caught with rates below 1%. If for the first one fourth of 2017, interest rates appear to be on the rise, it remains gentle. Buying a property therefore continues to be an attractive option for investors.


Real estate loans without factor progress

Real estate loans without contribution progress

To draw in a clientele of debtors with strong profiles, banking institutions are ready to make significant initiatives in the allocation of their credit score. This trend encourages actually some French to subscribe to an actual estate loan without justifying a personal contribution. The home loan without contribution allows these to avoid advancing several thousand pounds. If in practice the banking institutions often ask for a personal factor of about 10% of the quantity of the real estate transaction, they authorize full loans. This financing, therefore, includes transfer costs commonly called notary costs.

The percentage of non-equity loans furthermore increased in 2016. Based on some brokers, they displayed up to 15% of their funding against 5% in 2009. When the banks are ready to “play the particular game” it is above all since the financial risk is relatively lower for them. By lending over the long term for less significant monthly obligations, they reduce the risk associated with unpaid during the term from the loan agreement.