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Debts after death

mrsmaido Avatar
5y, 9m agoPosted 5 years, 9 months ago
Hi guys, rather depressing subject....
My dad passed away 3 weeks ago, he has left a lot of debt (all in his name and not secured on property). Today we found a life insurance payable to my mum and a pension amounting to approx £6000, the debts total about £25K. Anybody know if my mum will loose the money and have to hand it over to the debtors? She still has to pay £3K for funeral and still has a few years left on her mortgage.....
Any advice welcome, thanks in advance
mrsmaido Avatar
5y, 9m agoPosted 5 years, 9 months ago
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#1
pretty sure its not like the old days anymore, (but dont quote me).

think your dads debts are his, and dont pass down.
#2
They can only claim from your fathers estate, so i think anything in your mothers name is hers.
#3
I know that they can't touch the house and can't make my mum pay the debts, but have they got a claim on the insurance money or the pension?
It's not much but it would really help my mum get on her feet as you can imagine, she's cared for my dad for the last 7 years while he was ill and these debts have come as a total surprise, we had no idea until we broke into his breifcase today.
#4
your mum is the benificiary. the final payment is hers, nobody elses
#6

Thanks, having read that I'm just as confused tbh, it says any insurance or pension is considered part of deceased's estate, and debts will be claimed from the estate, think I'll have to go to the CAB, my mum really can't deal with any of this right now, all her life she's never had any debt (except the mortgage), this whole thing has terrified her.
banned#7
mrsmaido
Thanks, having read that I'm just as confused tbh, it says any insurance or pension is considered part of deceased's estate, and debts will be claimed from the estate, think I'll have to go to the CAB, my mum really can't deal with any of this right now, all her life she's never had any debt (except the mortgage), this whole thing has terrified her.

Hope you get it all sorted soon x x
#8
If you jointly owned your home and there's not enough money elsewhere in the estate to pay off the deceased person's debts, there is a chance that your home would have to be sold. Your options to avoid a sale depend on whether you owned it as 'tenants in common' or 'joint tenants'.
'Tenants in common'
If you were ‘tenants in common’, each of you owned a stated share of the property. The share belonging to the person who has died becomes part of their estate and goes to whoever is mentioned in their will. But if there are outstanding debts these must be paid first from that share.

To avoid a sale of the home, you and/or anyone due to inherit the second share will need to try to negotiate with those owed money ('creditors') and find the necessary money.
'Joint tenants'
If you were ‘joint tenants’, you owned the whole property together and the deceased person's share passes automatically to you.

But even though it's now in your estate, you can't ignore the debts. Creditors can apply for an 'Insolvency Administration Order' within five years of the death. This can have the effect of dividing the property in two and can force a sale. So it's in your interest to try to come to an agreement with people who are owed money, and try to pay them yourself.

The bit above doesn't look promising as it looks like they can chase for money from property but I think the best thing to do is just write on your mothers behalf stating that you are dealing with the finances on your parents behalf to all of the creditors involved and explain that there is no money available through the estate, enclose a copy of the death certificate, and ask for all debts to be written off and ask them for a letter confirming this action has been taken,
#9
sorry for your loss if your mum is policyholder on the insurance policy it goes direct to her doesnt form part of your dads estate.depends on how the pension has been set up but most likely been done with your mum as beneficiary. is the pension money the total fund or pension amount per annum?

Edited By: gog5y on Mar 01, 2011 00:44
2 Likes #10
Magicjay is the man to ask I believe.
1 Like #11
I know this sounds silly but would you not want to pay it back? I know you couldn't afford it before but now you have the means to pay, is it not morally right to pay back what you borrowed?
[mod] 4 Likes #12
OP - firstly, sorry for your loss.

This is not really the place for anyone to be leaving any (potentially) personal details of debts etc so instead of giving you some assistance of the actual circumstances I think you should take a look at this link here:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093

It is a good summary as to what happens with specific debts.

As someone has already pointed out, it is important to try and find out how the property was held.

There has been a couple of useful articles on Bitter Wallet which you can find here. They deal with hwhat happens to property held in joint names and also guides to Wills. That should put you on the right track.

If you did want me to look in to this any further then please drop me a PM. I would be more than happy to assist in any way I can.


Property article.


Wills - Part One
Wills - Part Two
#13
gog5y
sorry for your loss if your mum is policyholder on the insurance policy it goes direct to her doesnt form part of your dads estate.depends on how the pension has been set up but most likely been done with your mum as beneficiary. is the pension money the total fund or pension amount per annum?

Thanks for your replies.
That's the total fund in the pension, he's been disabled and not working for the last 10 years so it had been abandoned I think, I just found a statement from 2006 saying no payments had been added that year so I rang them up. Have sent of the death certificate today.
#14
norfolk_enchance
I know this sounds silly but would you not want to pay it back? I know you couldn't afford it before but now you have the means to pay, is it not morally right to pay back what you borrowed?

Firstly, I did not borrow any of this money, my mum knew nothing about any of these debts. We do not have the funds to pay over £24,000 worth of debts, my mum will be looking at getting approx £6000 from the life insurance and pension, £3000 of which has already been spent on the funeral, the rest she was hoping would be her back up fund as she is disabled herself and will be surviving on benefits, £3000 isn't much but it's peice of mind for a woman of 65 who is now a widow, she's saved up for everything all of her life, why should she have the stress of these debts at her time of life? (yes, my dad was foolish, but that isn't my mum's fault).
#15
magicjay1986
OP - firstly, sorry for your loss. This is not really the place for anyone to be leaving any (potentially) personal details of debts etc so instead of giving you some assistance of the actual circumstances I think you should take a look at this link here:http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093It is a good summary as to what happens with specific debts. As someone has already pointed out, it is important to try and find out how the property was held.There has been a couple of useful articles on Bitter Wallet which you can find here. They deal with hwhat happens to property held in joint names and also guides to Wills. That should put you on the right track. If you did want me to look in to this any further then please drop me a PM. I would be more than happy to assist in any way I can. Property article. Wills - Part OneWills - Part Two

Cheers, there is definatley no will. I will contact the mortgage providers tomorrow to see what the score is with the house.
[mod]#16
mrsmaido
magicjay1986
OP - firstly, sorry for your loss. This is not really the place for anyone to be leaving any (potentially) personal details of debts etc so instead of giving you some assistance of the actual circumstances I think you should take a look at this link here:http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093It is a good summary as to what happens with specific debts. As someone has already pointed out, it is important to try and find out how the property was held.There has been a couple of useful articles on Bitter Wallet which you can find here. They deal with hwhat happens to property held in joint names and also guides to Wills. That should put you on the right track. If you did want me to look in to this any further then please drop me a PM. I would be more than happy to assist in any way I can. Property article. Wills - Part OneWills - Part Two


Cheers, there is definatley no will. I will contact the mortgage providers tomorrow to see what the score is with the house.


Get hold of their title deeds and try and find a document called Transfer (TR1). On the second page (second box down) there will be a section that was completed about ownership.

Usually a married couple own a property jointly and the surviving owner inherits the property entirely. Therefore there are no shares.
#17
magicjay1986
mrsmaido
magicjay1986
OP - firstly, sorry for your loss. This is not really the place for anyone to be leaving any (potentially) personal details of debts etc so instead of giving you some assistance of the actual circumstances I think you should take a look at this link here:http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093It is a good summary as to what happens with specific debts. As someone has already pointed out, it is important to try and find out how the property was held.There has been a couple of useful articles on Bitter Wallet which you can find here. They deal with hwhat happens to property held in joint names and also guides to Wills. That should put you on the right track. If you did want me to look in to this any further then please drop me a PM. I would be more than happy to assist in any way I can. Property article. Wills - Part OneWills - Part Two
Cheers, there is definatley no will. I will contact the mortgage providers tomorrow to see what the score is with the house.
Get hold of their title deeds and try and find a document called Transfer (TR1). On the second page (second box down) there will be a section that was completed about ownership. Usually a married couple own a property jointly and the surviving owner inherits the property entirely. Therefore there are no shares.

Who holds the title deeds? Really hope the house isn't under threat, my mum has lived there 45 years and paid the mortgage off once, they only remortgaged to get double glazing and alterations to help with their disabilities, hopefully as you say it will be jointly owned. Thanks again for your time.
[mod]#18
mrsmaido
magicjay1986
mrsmaido
magicjay1986
OP - firstly, sorry for your loss. This is not really the place for anyone to be leaving any (potentially) personal details of debts etc so instead of giving you some assistance of the actual circumstances I think you should take a look at this link here:http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093It is a good summary as to what happens with specific debts. As someone has already pointed out, it is important to try and find out how the property was held.There has been a couple of useful articles on Bitter Wallet which you can find here. They deal with hwhat happens to property held in joint names and also guides to Wills. That should put you on the right track. If you did want me to look in to this any further then please drop me a PM. I would be more than happy to assist in any way I can. Property article. Wills - Part OneWills - Part Two
Cheers, there is definatley no will. I will contact the mortgage providers tomorrow to see what the score is with the house.
Get hold of their title deeds and try and find a document called Transfer (TR1). On the second page (second box down) there will be a section that was completed about ownership. Usually a married couple own a property jointly and the surviving owner inherits the property entirely. Therefore there are no shares.


Who holds the title deeds? Really hope the house isn't under threat, my mum has lived there 45 years and paid the mortgage off once, they only remortgaged to get double glazing and alterations to help with their disabilities, hopefully as you say it will be jointly owned. Thanks again for your time.


Since the Land Registration Act the deeds will have been scheduled and all the relevant stuff will be held with the solicitor/conveyancer following the remortgage. Do you know who they are? Give them a call.
#19
My dad died a couple of years ago and had a loan, but when we approached the bank about it they said the debt went with him and they closed his account (even transferring the money left in there to my mother).

It wasn't as large as the one mentioned here, but surely unless your mother was involved in some way (secured on house, guarantor etc), it would be no-one elses responsibility.

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