The elderly person passes away, and the daughter gives up inheritance. Who will pay the 400,000 mortgage? Shashi Court has a strategy to break the deadlock.

An elderly man suddenly passed away, and the only heir clearly renounced the inheritance. How should the remaining property be disposed of? Who should repay the debts? Recently, the People’s Court of Shashi District concluded a special case regarding the repayment of debts of a deceased person, successfully breaking the litigation deadlock by cleverly utilizing the estate administrator system in the Civil Code, helping creditors realize their claims.

In December 2021, Mr. Li applied for a loan of 400,000 yuan from a bank and registered a mortgage on a house under his name. In July 2024, Mr. Li suddenly passed away, leaving behind this unsettled loan and the mortgaged property. To recover the debt, the bank sued Mr. Li’s only legal heir—his daughter Xiao Li—requesting that she repay all debts within the scope of the inheritance. However, during the litigation process, Xiao Li clearly stated that she renounced the inheritance of all assets under her father’s name. According to relevant regulations, when an heir renounces the inheritance, they are not required to use their own assets to repay the debts of the deceased. In an instant, Mr. Li’s estate became “ownerless property,” and the bank’s path to safeguarding its rights reached a dead end, with the case’s trial also stuck in a stalemate.

The presiding judge turned attention to an innovative system in the Civil Code—the estate administrator system. According to Article 1145 of the Civil Code of the People’s Republic of China, if there are no heirs or if all heirs renounce the inheritance, the civil affairs department or the villagers’ committee at the deceased’s place of residence shall act as the estate administrator.

With the civil affairs bureau formally intervening as the estate administrator, this litigation, which was originally at a standstill, was revitalized. The civil affairs bureau not only appeared in court as required by law but also strictly performed its statutory responsibilities for estate liquidation and debt repayment, confirming the amount of debt Mr. Li owed to the bank. The court ruled that the civil affairs bureau, within the scope of managing Mr. Li’s estate, should repay the bank the principal of the loan and the corresponding interest.

After the judgment took effect, the civil affairs bureau legally disposed of the mortgaged property under Mr. Li’s name and used the proceeds from the disposal to fulfill the repayment obligation to the creditor, the bank. A seemingly “hanging” debt was resolved.

From “no one managing” to “someone managing,” and from “litigation deadlock” to “realization of claims,” the successful conclusion of this case is the first successful practice of using the estate administrator system to resolve issues of inheritance and debt repayment in this court. It is also a vivid portrayal of the civil affairs department fulfilling its functions and participating in social governance. The court’s adjudication guidance and the civil affairs department’s lawful performance of duties formed a synergy that not only safeguarded the legitimate rights and interests of creditors and ensured the order of the market economy but also effectively prevented the disorderly loss of estate, providing a replicable and promotable judicial model for handling “ownerless estates.” (Reporter: Zhang Mingjin Correspondents: Zhu Jie, Deng Ruting)

【Source: Jingzhou News Network】