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Debts After Death

By: Beth Morrisey MLIS - Updated: 13 Jul 2017 | comments*Discuss
 
Debts debts After Death death debts

When someone dies any private property, possessions, investments and other assets owned by that person becomes known as his or her estate. A chosen executor (as stipulated in the deceased’s will) or administrator (appointed by law if no will exists) will have this estate assembled and documented, valued, taxed correctly and finally distributed it to those who stand to inherit. This distribution will either take place according to the terms of the deceased’s will or by the laws of intestacy/succession if no will exists. Before this can happen, however, debts that are both owed by and owed to the deceased will need to be taken into account.

Debts Owed by the Deceased

When an individual dies and still owes money in debts, these amounts must be covered by the deceased’s estate. Insurance policies may be enough to pay off some debts, so always check to see if the deceased held death cover for a mortgage or some sort of payment protection cover for personal loans and/or credit card debt. Some of the debts that may need to be covered include water rates, Council Tax, utility bills, outstanding amounts on hire purchase agreements, tax debts and possibly even mortgages. Personal loans, credit card debt and other personal debts will need to be paid off by the estate as well, and if total debts can not be covered by insurance money and cash then property and personal possessions may need to be sold. If these items are sold for higher than the market value, tax may be due from the sale as well. If there is not enough value in the deceased’s estate to cover his or her debts, the debts will not necessarily pass on to a spouse or family member unless another individual was involved in joint loan with or guaranteed a loan for the deceased.

Debts Owed to the Deceased

Debts owed to the deceased are considered part of his or her estate and it becomes the responsibility of the executor or administrator of the estate to collect on these debts. Generally, however there will need to be written terms of the agreement to make it enforceable. Debts that were not stipulated in writing may be unenforceable and the money may not be able to be recouped. In fact, if loans were made on an informal basis to another individual there may not be any legal obligation for the other individual to pay them back. Business debts owed to the deceased should be discussed with a solicitor. A solicitor will also be able to advise the executor or administrator on how best to collect debts that are proving difficult to recoup.

The executor or administrator of the deceased’s estate will be primarily responsible for seeing that all debts owed by the deceased and all debts owed to the deceased are properly sorted and settled. It is highly advisable that a solicitor be involved in debt repayment and collection, though advice can also be sought from a Citizens Advice Bureau (CAB). Debts can take time to settle, so anyone expecting to inherit from the estate of a deceased friend or family member should remain patient and offer help as needed in order to smooth the process and ensure for an efficient settlement of all of the deceased’s affairs.

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My mother recently passed and has left her house (mortgage paid off) to myself, my brother and my sister (both of whom live in her house). However, my mother also left a certain amount of debt which only around half of can paid through her insurance policies. There's a shortfall of around £15,000...will the house have to be put up for sale in order for this to be paid? As stated, both of my siblings still live at the property. Can they be forced to sell? PS. The property is in Scotland.
Corky - 13-Jul-17 @ 3:56 PM
Carrie - Your Question:
My mum passed away 2 months ago. She was still owed her share of my grandma's will, which my aunt had never given to her. Am I entitled, as my mums only next of kin (my mum died without a will! ) to claim this money, approximately £35,000, from my aunt? I have a copy of my grandma's will as proof. Thank you for any info.

Our Response:
How long ago did the grandma die? Has the Will been adminstered yet?
FacingBereavement - 17-May-17 @ 12:56 PM
My mum passed away 2 months ago.She was still owed her share of my grandma's will,which my aunt had never given to her.Am I entitled, as my mums only next of kin (my mum died without a will! ) to claim this money, approximately£35,000, from my aunt?I have a copy of my grandma's will as proof.Thank you for any info.
Carrie - 16-May-17 @ 4:01 PM
Kitten - Your Question:
I was left a property in will ,it has a outstanding mortgage will want 2 take ,but mortgage company won't letMe were do I stand legally I lived in house for 11 years my grandads parents died and left me property they both lived with me

Our Response:
You should speak with a financial adviser to see if there's anyway you can get a mortgage/borrow in some other way. The only alternative would be to sell the property to repay the outstanding mortgage but a professional legal or financial adviser would be able to tell you more.
FacingBereavement - 2-May-17 @ 2:48 PM
I was left a property in will ,it has a outstanding mortgage will want 2 take ,but mortgage company won't let Me were do I stand legally I lived in house for 11 years my grandads parents died and left me property they both lived with me
Kitten - 2-May-17 @ 10:13 AM
Kitten - Your Question:
I was left property In a will ,I lived in home 11 years and me grandad lived with me but the morgate In his name and they won't let me take over morgate and are trying to sell home

Our Response:
If you were left the property in a Will we're not sure why it is not in your name now. Unless someone promised it to you in the Will but hasn't died yet? Sorry - there's not enough information here.
FacingBereavement - 29-Mar-17 @ 2:25 PM
I was left property In a will ,I lived in home 11 years and me grandad lived with me but the morgate In his name and they won't let me take over morgate and are trying to sell home
Kitten - 28-Mar-17 @ 10:38 AM
Milly - Your Question:
My friend recently passed away with a lot of debt if I sign the death certificate will I be reliable for his debt please help thank you

Our Response:
No you won't be liable for your friend's debts.
FacingBereavement - 16-Mar-17 @ 11:17 AM
My friend recently passed away with a lot of debt if I sign the death certificate will I be reliable for his debt please help thank you
Milly - 14-Mar-17 @ 12:15 PM
I lost my father last year, he still had a small mortgage on his house. I have shown the lender the death certificate and a copy of the will showing me as the sole beneficiary and informed them that I wish to pay the mortgage off and have the means to do so. They are not allowing me to pay it until probate is granted, but are still adding interest to the debt, which I feel is unfair. Does anyone know where I can find regulations regarding this and if they're allowed to do it?
jojo - 11-Jan-17 @ 6:16 PM
Ma1963c - Your Question:
My parents had a new carpet laid last October 2015. They paid for it I believe part debit card and then cash on it being laid. They weren't happy with bits of plastic within the carpet and requested compensation and arranged for an engineer to inspect it. Dad died suddenly on 7th December 2015 and mum died 25th February 2016. In July I started getting text messages from the shop saying that they never paid the balance when it was fitted. So now its my dead fathers word against the shop. any advice appreciated because they won't leave me alone. Thanks

Our Response:
Sorry you need to give more information? Did the engineer attend to inspect it? What was the outcome?
FacingBereavement - 13-Dec-16 @ 1:59 PM
My parents had a new carpet laid last October 2015. They paid for it I believe part debit card and then cash on it being laid. They weren't happy with bits of plastic within the carpet and requested compensation and arranged for an engineer to inspect it. Dad died suddenly on 7th December 2015 and mum died 25th February 2016. In July I started getting text messages from the shop saying that they never paid the balance when it was fitted. So now its my dead fathers word against the shop.. any advice appreciated because they won't leave me alone.Thanks
Ma1963c - 12-Dec-16 @ 4:24 PM
Keith - Your Question:
I received a letter from works and pensions for the repayment of pension paid to my mother in error a few days after she died nearly eight months ago. Her assets were divided up to beneficiaries seven months ago. Is this debt payable.

Our Response:
DWP are entitled to recover overpaid pensions. If there is nothing left in the estate however, they cannot be paid. Did you inform them immediately when your mother died? Have they tried to recover the payments previously?
FacingBereavement - 2-Dec-16 @ 11:36 AM
I received a letter from works and pensions for the repayment of pension paid to my mother in error a few days after she died nearly eight months ago.Her assets were divided up to beneficiaries seven months ago.Is this debt payable.
Keith - 1-Dec-16 @ 1:21 PM
jackie - Your Question:
Im the rep. Of my mother for all questions and doc. You need but we have a prblem for all call request cause aside from bevenent payments we want to know if my father have any property left in uk. Can I inquire if what dep. Can help me as a me where we ask a help for a any mobile plan for all call to uk gov. For all inquires call cost for requested additional information call is the requiremensts Hope you undrstant our situationbecause we undergoing crisis after my father pass away

Our Response:
Sorry but we cannot help without lots of information from you. Please go to a Citizen's Advice Bureauwhere they'll be able to direct you to the right people/organisations.
FacingBereavement - 29-Sep-16 @ 12:05 PM
Im the rep. Of my mother for all questions and doc. You need but we have a prblem for allcall request cause aside from bevenent payments we want to know if myfather have any property left in uk. Can i inquire if what dep. Can help me as a me where we ask a helpfor a any mobile plan for all call to uk gov. For all inquires call cost for requested additional information call is the requiremensts Hope you undrstant our situationbecause we undergoing crisis after my father pass away
jackie - 28-Sep-16 @ 4:01 PM
jackie - Your Question:
My mother passed away in July, a few days later I received a letter from her care home stating due to an over sight on their part she has a debt of £1976 , she had no will only a small amount of money in her bank that was used for her funeral. I did not have power of attorney. Who is responsible for this debt?

Our Response:
If someone dies and there is not enough in the estate to pay all the debts then these should be written off (i.e. her debts die with her as they cannot be repaid). As a relative, you are not liable for the debt unless you provided some sort of personal guarantee to the care home.
FacingBereavement - 14-Sep-16 @ 11:00 AM
My mother passed away in July, a few days later I received a letter from her care home stating due to an over sight on their part she has a debt of £1976 , she had no will only a small amount of money in her bank that was used for her funeral. I did not have power of attorney. Who is responsible for this debt?
jackie - 12-Sep-16 @ 12:51 PM
My partner has passed away she was on pip so I got free road tax when will I need to start paying for my road tax
Artie - 29-Aug-16 @ 7:02 PM
My son passed away had life insurance through his job but did not select a beneficiary why should his father benefit from his death when he didn't do anything for him when he was living he left student loans a number bill's a house with taxes due etc... why should I have to split his death benefits with the father
Me - 27-May-16 @ 11:06 PM
Dragon - Your Question:
My brother has passed away and I have been left to sort everything out my mum is not able too. He has no assets and no money that I have been able to track down although he could possibly have an online account but cannot find any evidence of this but just a monthly budget he had wrote down ratesetter and rainy day fund but that is all. He has a couple of debts that we are happy to sort and mum has paid for funeral there is no will. I have notified relevant providers banks etc of his death and did use tell us once. Legally is there anything else I need to do

Our Response:
Usually you will not need to go through probate if the value of the estate is small. However, if there is any evidence of money held online, a pension etc then it might be worth checking with a solicitor to see if probate is required.
FacingBereavement - 8-Feb-16 @ 12:25 PM
My brother has passed away and I have been left to sort everything out my mum is not able too.He has no assets and no money that I have been able to track down although he could possibly have an online account but cannot find any evidence of this but just a monthly budget he had wrote down ratesetter and rainy day fund but that is all.He has a couple of debts that we are happy to sort and mum has paid for funeral there is no will.I have notified relevant providers banks etc of his death and did use tell us once.Legally is there anything else I need to do
Dragon - 5-Feb-16 @ 8:48 PM
sad - Your Question:
Hi just wondering if my parent has passed away and has signed for a hp agreement what as been given to me for a present were do I stand on keeping it

Our Response:
If the parent is the hire purchaser then he/she (or on death, the estate) is responsible for the debt. Unless there are provisions for the car to be re-paid from the parent's estate, or the finance company will agree to you taking over the payments, it's likely that the finance company will simply take back the car and may even try and claim off the estate for any shortfall in payments owed and the car's current sale value.
FacingBereavement - 18-Dec-15 @ 10:29 AM
Hi just wondering if my parent has passed away and has signed for a hp agreement what as been given to me for a present were do I stand on keeping it
sad - 17-Dec-15 @ 12:11 AM
@mandy. You could try applying for bereavement payment - There's more information here.
FacingBereavement - 11-May-15 @ 11:53 AM
i need help with my mother'sdid not hvlife insurance I have to have her to have her service and burial I have no money
mandy - 4-May-15 @ 7:07 PM
At the time of my wife's death of cancer in June this year I wasn't in receipt. Of any other social things so was turned down even though I had no savings I got 2000 widowedd benefit but still left with bill of over 2000 to pay I had a kind of breakdown and now all I can think about is paying off her funeral it id near her birthday and it'd realy getting me down not having paid it it is on my mind every hour of the day I dont know where to turn to its realy making me sad that I cant do this for her I love and miss her so much and this isn't making it any easier P
Danny McFarland4 - 2-Dec-12 @ 6:52 PM
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