As far and as much as I know, if the children(s) is of legal age (not minor), they can apply to become Administrator in Letter of Administration (LA) of the Estate. The reason for this is because the spouse is bankrupt, therefore cannot become an Administrator without the consent of Insolvency Department.

After the LA is granted by the court, the children(s) can sell the property or transfer the decease property to the beneficiaries accordingly to the Distribution Act 1958 which is Spouse 1/3 share and Children 2/3 share. Say 900k, 300k to Spouse, 600k to children.

Meaning the spouse 1/3 share will be vested under Insolvency Department.

Three options here:
1) Use the LA to sell the property say RM 900k. 300k will be channel to Insolvency Department to pay off spouse creditor.

2) The children can buy off the spouse share (1/3) from Insolvency Department according to market value say (Rm 300k), and the proceeds will then pay off the spouse creditor.

3) Or just let 1/3 spouse share vested under Insolvency Department. Technically house owner can still stay in the house but cannot sell off the property. However, this is only subject to creditor not complaining to Insolvency Department to realise the Spouse share. If thats the case, the children will have to either go to Option 1 or Option 2.

Above is only a rough idea (which I may be wrong, I stand to be corrected). Any technicality regarding how to apply for LA and go about it, better hire lawyer to solve this complex issue.

Cheers. Please update us on the issue, so that we can learn more.   

Kawan, if the owner is still alive then different story and senang cerita already lah.

Put children to the will lah. Not to the spouse. Habis cerita. There is no law stating that will must have spouse or whoever that is.