Charging Order and Inheritance

ylesia

Hi

Please forgive me if this has already been asked and answered somewhere but I can't seem to find anything.

I know that the best that my Mums creditors can do is put a charging order on the house (from great advice on this site) and that they couldn't force the sale. So as long as my Mum and Dad don't want to sell then the creditors hands are tied.

In the event of death what happens then? I am not expecting my parents to pop their cloggs anytime soon (well I hope not anyway) but I am just wondering if then the house must be sold if there are charging orders on it? Or does the charging order just simply sit there until the house is eventually sold regardless if the house changes hands due to inheritance.

Cheers for any advice.

10past6

ylesia wrote: »

So as long as my Mum and Dad don't want to sell then the creditors hands are tied

Not true, a creditor has the legal right to request a "force sale" BUT they need permission from the court in order to do so.

It very, very, seldom happens, especially given today's current climate.

ylesia wrote: »

I am just wondering if then the house must be sold if there are charging orders on it?

If it's a joint debt, and one part of the party dies, the CO remains, if both parties die, the debt & CO are removed.

ylesia

10past6 wrote: »

Not true, a creditor has the legal right to request a "force sale" BUT they need permission from the court in order to do so.

It very, very, seldom happens, especially given today's current climate.

If it's a joint debt, and one part of the party dies, the CO remains, if both parties die, the debt & CO are removed.

Thanks for the quick reply. Sorry for being thick but I think I'm misunderstanding your reply. So if my parents were both to die then the debt would effectively die with them, even though there is money in the estate (in the form of the house?) (all the debt is unsecured)

As I said before I'm hoping my parents live for another good 20 years at least but even then only half my Mums debt would be paid off and that's assuming all her creditors continue to freeze interest.

Bossyboots

No, if both your parents die then the debt is repaid from the estate (in this case the sale of the house presumably) after the funeral expenses have been met (there is a hiearchy of debt repayments on death). Debts are paid from the estate until there is nothing left or if the debts are paid leaving a surplus, that is then dealt with in accordance with any will or intestacy rules where no will exists.

10past6

Bossyboots wrote: »

No, if both your parents die then the debt is repaid from the estate (in this case the sale of the house presumably) after the funeral expenses have been met (there is a hiearchy of debt repayments on death). Debts are paid from the estate until there is nothing left or if the debts are paid leaving a surplus, that is then dealt with in accordance with any will or intestacy rules where no will exists.

I trust Bossyboots explanation is clearer than mine

ylesia

Thanks for the replies, so basically the house would have to be sold immediately to settle the debts, if there is a charging order or not. Sorry this is probably very morbid talking like this but I like to understand the long term implications of not settling the debt and just leaving it run on the DMP.

10past6

It's a complicated issue, but I'll try and explain it basically for you.

Debts do not die if monies are available (equity).

The executor of the estate has a legal obligation to satisfy any outstanding debts.

The creditor may well seek a forced sale to obtain the amount due, if you the defendant object to the forced sale, you will be expected to find the outstanding monies from somewhere.

All that being said, the ultimate decision whether a forced sale should be granted rests with a judge.

You will need to seek legal advice, should you find yourself in the unfortunate position.