What happens to debts when you die?

[TheFaQQer]

Many thanks for the replies. We are going to contact CAB - age UK is a good one - cheers!

The flat was owned as joint tenants so I believe will pass to her husband automatically? Neither of them had any other assets.

Make sure they really were joint tenants rather than tenants in common - there's a big difference between the two, which will determine whether there is an estate to pay out of or not.

[BrilloPad]

Step 1 was to call Bank1. Mother-Out-Law(MOL) has 2 accounts with them and credit card. Credit card had a large balance.

They offered to waive all the credit card debt! And to transfer the balances in the accounts to my wife. She just has to pop into her local branch with the death certificate and her bank card.

Similar position with Bank2 and Bank3 - lets see how that goes.

I am not sure that the store cards will be as forgiving!

[Mattski]

My condolences to you & your family - that's a horrible thing to happen.

Someone already mentioned Stepchange earlier. I don't know the best way forward for you to get everything resolved, but what I do know from experience is that they're very good and could likely be a great source of help if things go drastically south. It's worth keeping them in mind if nothing else. That said I hope you get everything squared away as quickly and as easily as possible.

[Unix]

Will the life insurance payout not cover the debts?

[BrilloPad]

Will the life insurance payout not cover the debts?

No life insurance.

[ASB]

Her personal assets and liabilities should be fairly clear.

I would be cautious about transfer of assets. I assume that is only because mrs bp is executor or pr? She has personal liability to settle the estate correctly. Also normally needs permission from the probate office to access.

The issue is the joint property.

if it was held as tic then sale could theoretically be forced in order to settle the debts. It would normally be part of the estate.

If it was held as jt then it is not part of the estate and cannot be claimed against.

but.....

Joint tenancys can become automatically converted to tic by certain events.

divorce, bankruptcy spring to mind. There are probably others.

Creditors will often rely on executors not being well advised and try and claim when n they have no basis in law. Try not to forget the ad in the london gazette too.

if the objective is to end up with a bankrupt estate and some debt dying with it then everything needs to be done absolutely correctly or the executor has a big problem with personal liability.

edit: if the asset were able to be attacked hrough insolvency rules prior to death it can be attacked after. I.e. in effect a creditor can still petition for bankruptcy after death.

[Unix]

No life insurance.

Really? Not good. Hopefully the debts will not be on him.

[BrilloPad]

Her personal assets and liabilities should be fairly clear.

I would be cautious about transfer of assets. I assume that is only because mrs bp is executor or pr? She has personal liability to settle the estate correctly. Also normally needs permission from the probate office to access.

The issue is the joint property.

if it was held as tic then sale could theoretically be forced in order to settle the debts. It would normally be part of the estate.

If it was held as jt then it is not part of the estate and cannot be claimed against.

but.....

Joint tenancys can become automatically converted to tic by certain events.

divorce, bankruptcy spring to mind. There are probably others.

Creditors will often rely on executors not being well advised and try and claim when n they have no basis in law. Try not to forget the ad in the london gazette too.

if the objective is to end up with a bankrupt estate and some debt dying with it then everything needs to be done absolutely correctly or the executor has a big problem with personal liability.

edit: if the asset were able to be attacked hrough insolvency rules prior to death it can be attacked after. I.e. in effect a creditor can still petition for bankruptcy after death.

Interesting post. IMO possession is 90% of the law. Bank1 handed over the money. No probate required. Tough luck after that. Its only a few quid anyway!

Mrs BP is joint executor. If anyone gives her any grief I will post back here. Mrs BP is not to be messed with!

Really? Not good. Hopefully the debts will not be on him.

Not at all. The debts were in her name. The house was joint tenants. So creditors can go whistle.

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I do find it interesting that a seemingly easy problem and easy solution can provide so many differing opinions! I want a refund of my CUK membership fees!

[TheFaQQer]

The flat was owned as joint tenants

The house was tenants in common.

Make sure you know which it really was - it'll make a big difference.

[BrilloPad]

Make sure you know which it really was - it'll make a big difference.

Someone reads my posts! Wow!

Great spot Sir. Definetly joint tenants. I got the land registry doc.