Federal Rule of Bankruptcy Procedure 1016 states that for a Chapter 7 bankruptcy (most common in personal bankruptcy), in the event of the death or incompetency of a debtor, the estate should be administered in the same manner as if the death or incompetency did not occur. Thus, death of debtor alone will not result in dismissal of a bankruptcy petition.
However, if the petition is filed under Chapter 13 (or another chapter), Federal Rule of Bankruptcy Procedure 1016 states that the case may either be dismissed or, if possible and in the interest of all parties, the case may proceed. In this situation, it would depend on the circumstances of the case.
Bankruptcy planning, especially determining which chapter for relief to file, is difficult enough. Adding the possibility of a debtor passing away or becoming incompetent during the petition process creates additional complexities that must be properly evaluated by a knowledgeable bankruptcy attorney. As a highly skilled bankruptcy attorney, I make it my goal to provide each client dedicated the time and experience to assist clients with their bankruptcy filing.