Updated in August 2026
Short answer: the deceased estate, not the heirs, is the primary bankruptcy pool
If the deceased person’s liabilities exceed the inherited assets, Article 223.1 of Federal Law No. 127-FZ allows an existing bankruptcy case to continue under special rules or a new case to begin after death. The procedure collects the inherited assets and the deceased’s creditor claims. The heirs’ personal property does not automatically enter the insolvency estate.
The central issue is whether the inherited assets can be separated from each heir’s personal property. The Supreme Court stated that separability is presumed for three years after death unless the contrary is proven. This is not a universal statutory filing deadline: the court examines the assets, their preservation and any commingling.
Three situations that must not be confused
A bankrupt person inherits
A living debtor acquires inherited assets before or during personal bankruptcy. A separate article addresses disclosure and inclusion in that debtor’s insolvency estate.
Ordinary claim against heirs
A creditor claims against heirs who accepted the inheritance under Article 1175 of the Civil Code, within the value of the inherited property.
Bankruptcy of a deceased estate
Where liabilities exceed assets and the inherited property can be separated, the collective procedure under Article 223.1 applies.
Two routes into the special procedure
Death during an existing case
The commercial court applies the special rules. If debt restructuring was pending, the insolvency practitioner or, where required, the notary raises the transition to liquidation of assets.
Application after death
A bankruptcy creditor, authorised public body or heir who accepted the inheritance may apply. The court checks the debt, insolvency grounds and separability of the inherited property.
Participants and their roles
| Participant | Main role | Key checks |
|---|---|---|
| Creditor or authorised body | Prove the claim and grounds for opening the case | Amount and nature of debt, required judgment, assets and competing creditors |
| Notary | Participate before the acceptance period expires and disclose inherited assets | Place of succession, estate file and statutory powers |
| Heirs who accepted | Exercise the deceased’s procedural rights and duties after the statutory period | Acceptance, asset value, preservation and commingling |
| Insolvency practitioner | Form the estate, identify creditors and realise assets | Succession file, registers, past transactions, housing, security and current expenses |
What enters the insolvency estate
Article 223.1(7) covers property forming the deceased person’s inheritance. It may include real estate, vehicles, bank funds, shares, securities, receivables and property recovered after transaction challenges.
An heir’s own home, salary, accounts and other personal assets do not enter merely because the heir accepted the inheritance. The analysis becomes more difficult if inherited money has been spent or commingled, or inherited property has been sold or replaced. The Supreme Court described a case where an inherited deposit was spent and the degree of commingling prevented a separate deceased-estate procedure.
Asset separation is the central question
The court reviews the estate inventory, certificates, bank statements, transfers, heirs’ transactions and physical availability of property. Separability is presumed for three years after death unless proved otherwise. Property preserved in kind is generally easier to separate than money spent and mixed with later income.
Acceptance of the inheritance does not itself prevent Article 223.1 from applying. Heirs may transfer preserved assets into the insolvency pool, and related cases may be joined into one procedure concerning the deceased’s property.
What happens to the only home
There is no universal answer. The Supreme Court held that where the deceased’s apartment became the heir’s and family’s only suitable home, enforcement immunity should be assessed as if the deceased were alive. In the reviewed case, the deceased’s share was excluded because the entire apartment was used by the heir and child as one home.
The court still considers a mortgage, household composition, actual occupation, other housing, reasonable housing needs and abuse. Neither preservation nor sale can be guaranteed in advance.
Practical sequence for an heir
Open the succession file
Obtain the notary’s details and record known assets and liabilities.
Avoid commingling
Do not spend inherited funds or dispose of assets before assessing the debts and procedural risks.
Preserve evidence
Keep statements, contracts, valuation records, housing evidence and security documents.
Check proceedings and claims
Review commercial-court, insolvency, enforcement and ordinary-court records.
Select a procedural position
Compare an ordinary succession claim, special bankruptcy and the consequences of disclaiming the inheritance.
Raise property objections
Submit evidence to the commercial court in disputes over housing, estate composition or commingling.
Practical sequence for a creditor
- Prove the debt and check whether the obligation was strictly personal to the deceased.
- Identify the place of succession, the notarial file and heirs who accepted.
- Compare assets, liabilities, security and competing creditor claims.
- Check whether inherited property remains identifiable and separable.
- Choose between an ordinary claim and collective insolvency, considering costs and the expected estate.
- Comply with the creditor-claim procedure and monitor publications, the register and practitioner conduct.
Current expenses and priority
The Bankruptcy Law gives special treatment to necessary expenses caused by death and preservation of the estate. Alongside other statutory current claims, funeral costs, estate-protection expenses and notarial acts receive first-priority treatment. Their amount and connection with the estate must be documented.
Common mistakes
- assuming that accepting an inheritance automatically makes the heir bankrupt for all of the deceased’s debts;
- selling or spending assets before assessing separability;
- confusing Article 223.1 with the heir’s personal bankruptcy;
- promising preservation of the only home without checking a mortgage and actual occupation;
- failing to notify the notary or insolvency practitioner of the death and succession file;
- opening an expensive proceeding without checking the estate and competing creditors.
Frequently asked questions
Can bankruptcy begin after the debtor’s death?
Yes. Article 223.1 permits an application by a bankruptcy creditor, authorised public body or heir who accepted the inheritance. The court checks standing and the statutory grounds.
Do the heirs themselves become bankrupt?
Not automatically. If the assets are separable, the procedure concerns the deceased estate. An heir’s personal bankruptcy is a different proceeding requiring independent grounds.
What if the inheritance has already been accepted?
Acceptance does not prevent the special rules from applying. The important issue is whether the property remains identifiable and separate from the heir’s assets.
Can the deceased’s apartment be preserved?
Sometimes, where it is the heir’s and family’s only suitable home and the conditions for enforcement immunity are met. A mortgage, other housing and actual use require separate assessment.
Who participates before the inheritance is accepted?
Before the statutory acceptance period expires, the notary at the place of succession participates. Afterwards, heirs who accepted exercise the relevant procedural rights and duties.
Official sources
- Article 223.1 of Federal Law No. 127-FZ;
- Supreme Court personal-bankruptcy review of 18 June 2025, amended 29 April 2026, Section V;
- Civil Code Article 1175 on heirs’ liability;
- Civil Procedure Code Article 446 on protected property.
Related materials
Need to assess inherited assets and debts?
We can review the notarial file, creditor claims and property records and identify the proper procedure without confusing the heir’s personal assets with the deceased estate.