Where there is some estate
If the deceased’s estate cannot cover the debts in full, the estate is technically insolvent and the executor will cease dealing with the deceased’s property. The executor, once aware the estate is insolvent, can apply for the estate to be sequestrated. Anyone who is entitled to be appointed as an executor can apply for sequestration of an insolvent estate.
The executor will make an application to the Accountant in Bankruptcy. The application of sequestration will proceed in the same way as a normal sequestration using the BASYS system (see Chapter 6), either by the executor using an accredited money adviser, or by passing the case to an insolvency practitioner. The executor is only liable to pay the deceased’s debts up to the extent the funds in the estate allow them to. For example, if the total debts are £10,000 and, after paying funeral and deathbed expenses, the estate is only worth £3,000, and the executor is only responsible for paying £3,000. In these cases, the estate should be made bankrupt or alternative solutions such as offers of composition can be made.