What Happens to a loan after death?

lukebetteralone

hi there,
on friday my grandad passed away after a massive heart attack.

now i have dealt with his bills for the past year since my nan passed.

he has had a loan with halifax for the past 12 months. it was for 7000 over 48 months

he has no estate and about 2500 in his bank account. he also owes 2800 on a natwest credit card.

what would happen to that loan. also he had no life insurance or nothing.

any advice much appriciated.

CLAPTON

debts (presumably in his sole name) are paid from the deceased estate
if there is insufficent money in the estate then the debts die.

lukebetteralone

yes they were in his sole name.

i cant register his death yet, he also had a contract with orange for his phone with 12 months left to run. and they have barred the phone and asked for his death certificate o close it completley

its such a lot of work to do..

CLAPTON

I'm not sure what you mean, surely the very first thing to do is to register the death... little can be done until you have a death cert (best to get several copies ) as very company will ask to see a copy.

lukebetteralone

the coronor has not released papers yet. hopefully it will be tomorrow.

simpywimpy

Although he has a little savings in the bank, I would still ask the jobcentre for a form to claim for funeral expenses as you won't be able to access that money for a while until everything is sorted out.

lukebetteralone

the funeral directors are pretty good with us, we've had to use them twice in the last 20 months. but i will keep it in mind if we need too.

thanks for everyones advice again

CLAPTON

most banks will release funds for the funeral before probate

PaulW922

The above advice is correct - a debt cannot be inherited and it will die with him after his estate has been liquidated. Just one point though - if he has £2500 in his bank account and the account is with either NatWest or Halifax they may have the right of offset - ie they take the money from the bank account and put it towards the debt. I suppose it should not matter much to you either way. .. Dealing with someone's estate can be difficult and I hope it all goes ok for you - I had a relative die last year in the opposite position - a lot of money in the bank and a property - it still didn't stop the utilities hassling us for the unpaid bills etc.

lukebetteralone

update>
ive now got a death certificate to i can send to halifax loans. i just need to write a covering letter to explain he had no estate and not quite enough money to cover his funeral.

could anyone pm me with ideas or write it hear. cheers

RobertoMoir

Hi,
First of all, sorry for your loss.

ive now got a death certificate to i can send to halifax loans. i just need to write a covering letter to explain he had no estate and not quite enough money to cover his funeral.

could anyone pm me with ideas or write it hear. cheers

To be honest, just say it like that. You don't need to garnish it with a lot of flowery words or legal mumbo jumbo. They've got better things to do than read through that and at the moment I'm sure you have plenty of things on your mind besides writing that kind of over-done letter. Simply tell them for now that he's passed away, that you are the executor of his estate, and that while you are still working out his exact liabilites and assets you currently don't believe he had ample assets to pay off the balance of the loan.