I'm going to put an example with some made-up figures because honestly, I haven't gotten to the bottom of the real figures I'm dealing with. But I just want to verify if I understand the concept.
Lets say a guy has paid-off 3 houses. But he also has a huge amount of unsecured which pretty much equals the value of the houses. Then guy dies and court freezes everything. Which one of the following applies:
1) Houses go to heirs and unsecured debt goes to hell.
2) Houses get sold to pay the unsecured debt.
I believe is #2 , debt gets paid, then heirs get the rest if there's anything left. Am I correct?