Set how an insolvent estate pays its debts

Key facts

Human involvement

Yellow · Close supervision

How AI is used

From the asset and debt lists, record whether the estate can pay the debts and liabilities in full. If it cannot, list the funeral, testamentary and administration expenses separately from the other debts. Do not rank the other debts. The tool does not pay a creditor.

What the lawyer must review

Section 46C(1) of the Probate and Administration Act 1898 (NSW) says that where the estate is insolvent, the real and personal estate is administered in accordance with Part 1 of the Third Schedule, subject to the Bankruptcy Act 1966. Insolvent means insufficient for payment in full of the debts and liabilities. The section applies to a person dying after the commencement of the Conveyancing (Amendment) Act 1930. That date was not opened. Part 1 says the funeral, testamentary and administration expenses have priority. Subject to that, the same rules apply as under the law of bankruptcy in force at the death, as to secured and unsecured creditors, debts and liabilities provable, the valuation of annuities and future and contingent liabilities, and the priorities of debts and liabilities. The date of death is substituted for the date of the sequestration order. The bankruptcy priority classes were not opened, so they are not listed. The solvent order in Part 2 is a separate task and is not used here.

Written for / version

US