When the debt secured by a mortgage exceeds the value of the deceased's property, the mortgage creditor retains the rights and remedies conferred upon him by his mortgage .
Depending on the circumstances and conditions stipulated by law, the mortgage creditor may, in particular, exercise a mortgage recourse against the property. These recourses may include taking possession for administrative purposes, taking possession in payment, sale by the creditor, or sale under judicial control.
The liquidator must therefore verify the nature of the mortgage, the amount of the secured debt, its ranking and the steps already taken by the creditor before deciding how the property will be treated in the liquidation.
When the property is sold and the proceeds are insufficient to fully settle the secured debt, a balance may remain owed to the creditor. The treatment of this balance depends, in particular, on the recourse exercised by the creditor and the applicable rules.
In an insolvent estate, any outstanding debt that remains validly owed must be taken into account in the liquidation with the other debts of the estate and be dealt with in accordance with the rules applicable to the payment of creditors.
The fact that the debt secured by a mortgage exceeds the value of the property does not, however, in itself mean that the heirs must personally pay the balance. In principle, their liability for the debts of the estate is limited to the value of the assets they inherit, subject to the exceptions provided by law.