The quick answer is no. But a recent case in Massachusetts involved some twists and turns on this point.
In the Mbarzira case, the debtor died in the middle of the bankruptcy proceedings. There is nothing controversial there; when that happens, the bankruptcy code is crystal clear that a chapter 7 case continues despite the debtor’s death, much like a probate case can distribute property post-mortem.
However, the usual rule in bankruptcy is that exemptions are fixed upon the filing date of the case, and are usually immune to what happens afterward, wrote Massachusetts bankruptcy judge Christopher Panos, adding that this rule should rarely be violated. Therefore, the death of the debtor was not a bar to claiming an exemption on her homestead.
But that didn’t mean that her heirs got a chance to touch the proceeds from the sale of the home, which was sold in an auction ordered by the bankruptcy court. Since the property was sold, all that was left was a mortgage, and there was nothing for the homestead exemption to attach to. So the bankruptcy trustee was allowed to keep the proceeds, and use the money to pay off the dead woman’s creditors.