I would appreciate some advice

My japanese plum tree slowly died this year, probably due to late frost and then hail. At least I thought so, however after cutting it down I found some kind of larvae in the ground. I would like to replace the tree with a peach tree in the same spot next spring. Should I just dig up the area or use some 10% Clorox first? I am restricted by little room. The other option is to wait another year before planting. Does anyone here have a good suggestion?