Can the liquidator sell a property from an insolvent estate to pay off debts?

Yes. The liquidator can sell real estate belonging to the estate when such a sale is necessary to obtain the funds required to pay the debts of the estate.

However, the liquidator generally cannot decide to sell the property alone. He must obtain the consent of the heirs or, failing that, authorization from the court.

Before proceeding with the sale, the liquidator should, in particular, take into account:

• of the value of the property;
• of the balance of any debt secured by a mortgage;
• other debts of the estate;
• cash and other available assets to pay for them;
• costs related to the preservation and sale of the building.

In an insolvent estate, the proceeds from the sale cannot be freely distributed to the heirs. They must be used to pay creditors in accordance with the applicable rules, taking into account the nature and priority of the debts.

The presence of a mortgage on the property does not necessarily prevent its sale. However, it must be taken into account during the transaction and in determining the amounts that will actually remain in the estate after the sale.

The sale of a property is therefore not automatic simply because an estate is insolvent. It must be justified by the needs of the liquidation and carried out in accordance with the applicable rules.