Credit Owed by deceased person

DSmiffy

CLAPTON wrote: »

Do bear in mind that they can legally claim from the value of his share in the house.

I can't believe that they would expect my mother, a pensioner, to take out a loan or remortgage the house in order to give them my dad's part of it to pay off a credit card debt. Is that what your saying?

lisyloo

I can't believe that they would expect my mother, a pensioner, to take out a loan or remortgage the house in order to give them my dad's part of it to pay off a credit card debt. Is that what your saying?

I'm not sure if this is correct - but I'm happy to be correctly.

If the house is held as joints tenants then it's jointly owned by both people (and not half each).
When one dies it is automatically owned by the other and I believe this is outside of the will.

Perhaps someone else can confirm or deny.

If they own 50/50 each as "tenants in common" then that is different, but I though joint wasn the more common default.

Alfie_E

lisyloo wrote: »

When one dies it is automatically owned by the other and I believe this is outside of the will.

Perhaps someone else can confirm or deny.

You’re correct. However, a court can look at it differently. If a person who is alive defaults on a debt, their share of any joint property can be considered. In a similar way, a court can look back and ask whether the deceased could have paid all their debts just before they died with what they owned outright. If they answer is that they couldn’t have paid, the court can allow any jointly owned property to be considered.

If courts couldn’t do this, the surviving joint owner could benefit unfairly at the expense of the lender. Imagine a debt for hundreds of thousands of pounds and a million-pound mansion. A credit card company is very unlikely to chase a widow for a three thousand pound debt. There would be the legal costs associated with having a court declare the husband insolvent at the date of death and getting a charging order on the property. After this, they still won’t have recovered the money. What they might have is a widow who will tell everyone what a terrible company they are.

CLAPTON

lisyloo wrote: »

I'm not sure if this is correct - but I'm happy to be correctly.

If the house is held as joints tenants then it's jointly owned by both people (and not half each).
When one dies it is automatically owned by the other and I believe this is outside of the will.

Perhaps someone else can confirm or deny.

If they own 50/50 each as "tenants in common" then that is different, but I though joint wasn the more common default.

If the house was held as joint tenants, then it is outside the scope of probate and outside the scope of IHT but its not in principle excluded from the decreased debts.
But as already said, whether anyone would pursue for a relative small amount is another matter.

FalkirkLad

My dad died recently. Luckily everything was in my mum's name. All debt was in my dad's name and the house was jointly owned.

Jointly owning a property does not guarantee half the share automatically transfers to the survivor. The deeds that was signed when the house was bought, has to be checked. If there is a "survivorship clause" then it automatically transfers to the survivor of the deceased. If this clause is not contained in the deeds, jointly owned or not, this can become part of the estate and creditors would have a legal claim.

CLAPTON

FalkirkLad wrote: »

My dad died recently. Luckily everything was in my mum's name. All debt was in my dad's name and the house was jointly owned.

Jointly owning a property does not guarantee half the share automatically transfers to the survivor. The deeds that was signed when the house was bought, has to be checked. If there is a "survivorship clause" then it automatically transfers to the survivor of the deceased. If this clause is not contained in the deeds, jointly owned or not, this can become part of the estate and creditors would have a legal claim.

Can you say whether you live in scotland as I don't believe this applies in England.