Reply to: What happens to debts when you die?

[tvr450]

Goodness, a three page thread and nobody has fallen-out, NorthernLadUK has not waded in all guns blazing.

Must be a first

[Safe Collections]

I nearly forgot to update the thread.

All the store cards got their credit via one company. They have accepted that they will whistle for the debt.

Bank3 also agreed to cancel all the debts and to transfer credit money direct to MrsBP. They then sent a letter saying that the person in branch gave her the wrong forms to fill in. MrsBP has sent them a stroppy letter back comparing their behaviour to bank1 and bank2.

Did I mention that her mother left loads of decent furniture and jewelry?

mother-out-law played a blinder there - I am well impressed. Hopefully these institutions might learn that you should not just put credit about willy nilly. Serves them right.

Just one last thing, it might be best to keep hold of any documentation in regard to the estate and the like around for a couple of years just in case these "debts" end up anywhere else...

It's rare but not unheard of for closed accounts to get sold on erroneously and having the documents to show it was written off by the original creditor will be the easiest way to resolve it.

[BrilloPad]

I nearly forgot to update the thread.

All the store cards got their credit via one company. They have accepted that they will whistle for the debt.

Bank3 also agreed to cancel all the debts and to transfer credit money direct to MrsBP. They then sent a letter saying that the person in branch gave her the wrong forms to fill in. MrsBP has sent them a stroppy letter back comparing their behaviour to bank1 and bank2.

Did I mention that her mother left loads of decent furniture and jewelry?

mother-out-law played a blinder there - I am well impressed. Hopefully these institutions might learn that you should not just put credit about willy nilly. Serves them right.

[BrilloPad]

Bank 2 done and dusted.

credit card with 4500 debt
current account 50 debt
savings account 5000

Bank 2 said they wanted the 5000 to pay the debt. Mrs BP asked for the money for funeral costs. This is allowed (just as well they did not know about the funeral fund elsewhere!).

After that they looked at the 5000. It was in joint names. So automatically goes to the survivor. Turns up to be his funeral fund anyway.

Dead easy this. Pun intended....

[Safe Collections]

Ok, mrs bp has access to the funds as a result of being joint exec. If she starts disbursing them before dealing with the debts she is in trouble.

the bank have written off a cc debt,; in writing I assume, so that is at least that one dealt with.

the balance appears to be catalogs and store cards.

they could, if they felt it likely to be beneficial, attempt to obtain the relevant order to attack the jont tenancy.

If the executors explain the position they might play ball.

but if they dont be very careful. Executors owe a duty of care to creditors. Insolvency legislation does cover bankrupt estates. Proffessional executors would probably just hand it over to an insolvency practitioner.

Just to add, it is possible for an executor of an insolvent estate to be found personally liable for the debts of an insolvent estate if the distribution (such as it is) is not handled correctly. You can get some good info and template letters on this site and some more general info on potential personal liability here.

Hope that helps.

[BrilloPad]

Any chance the Bank had sold some kind of PPI that also covered death? I may have been cheaper for them to settle the debt on the quiet rather than having you try and claim back thousands in PPI

I'd also try to check if any insurance was attached to the other debts

I passed straight onto Mrs BP - very interesting.

BTW the MOL had a bond to pay for the funeral. There was some spare change left over. The creditors can whistle for that too....

[Magpie252]

It is interesting that Bank1 have not even attempted to recover their credit card debts. They just paid out the money.

Any chance the Bank had sold some kind of PPI that also covered death? I may have been cheaper for them to settle the debt on the quiet rather than having you try and claim back thousands in PPI

I'd also try to check if any insurance was attached to the other debts

[ASB]

Bp,

A number of credit agreements contain provisions for writing off on death. This was very common with credit cards. It could be the case here. But the point is moot. It has happened.

you may find it beneficial to look up insolvency administration order.

it may be prudent for the executors to apply for one.

There are plenty of cases of people chasing joint assets for settlement. But would a store card for a couple of grand. Dunno, seems doubtful.

general advice for executors of a bankrupt estate (and I looked this up rather than it being based on the couple of solvent estates ive done) seems to be to apply for insolvency administration order and to negotiate with creditors where there are assets but they are outwith the estate.

it seems to me they can probably be told to go whistle. But if they are going to get really pushy and drag it out pushing up costs some sort of compromise against the survivor's estate might be appropriate.

[BrilloPad]

Ok, mrs bp has access to the funds as a result of being joint exec. If she starts disbursing them before dealing with the debts she is in trouble.

the bank have written off a cc debt,; in writing I assume, so that is at least that one dealt with.

the balance appears to be catalogs and store cards.

they could, if they felt it likely to be beneficial, attempt to obtain the relevant order to attack the jont tenancy.

If the executors explain the position they might play ball.

but if they dont be very careful. Executors owe a duty of care to creditors. Insolvency legislation does cover bankrupt estates. Proffessional executors would probably just hand it over to an insolvency practitioner.

Understood.

It is interesting that Bank1 have not even attempted to recover their credit card debts. They just paid out the money. I am not sure if store cards will ever find out about this. If they do its only a few quid they can recover.

I wonder if there is a case where creditors attempted to challenge a joint tenancy? Even if they did, the best they could get would be a charge on the property(new owner is 85 and in bad health). But imagine what the media would make if they got hold of the story! They would lose millions in reputation.

Mrs BP is not going to lie to anyone. The debts are about £15k in total. Largest creditor about £7k. Fees would probably eat that straight away. So I reckon they will have to whistle. But lets see. I will keep everyone updated.

[ASB]

Someone reads my posts! Wow!

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

Ok, mrs bp has access to the funds as a result of being joint exec. If she starts disbursing them before dealing with the debts she is in trouble.

the bank have written off a cc debt,; in writing I assume, so that is at least that one dealt with.

the balance appears to be catalogs and store cards.

they could, if they felt it likely to be beneficial, attempt to obtain the relevant order to attack the jont tenancy.

If the executors explain the position they might play ball.

but if they dont be very careful. Executors owe a duty of care to creditors. Insolvency legislation does cover bankrupt estates. Proffessional executors would probably just hand it over to an insolvency practitioner.

[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.

[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]

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!

[Unix]

No life insurance.

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

[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.