Paying off Debt Management Companies when someone dies?

debsley_pig

Hi

Does anyone know if debts with Debt Management Companies need to be paid off when someone dies? We have a family situation whereby an elderly member of the family who is dying has a lot of debt with a DMC (Gregory Penn, I think). The DMC has been contacted and have assured us that the debts will die with that person as some sort of gentleman's agreement, or something. I am highly sceptical, however. I know that personal loans etc that are not insured have to be paid off when someone dies, but I have no idea about DMC's. Anyone have any ideas/previous experience?

Thanks in advance

mountainofdebt

and I stress think that if the deceased's assets don't cover the outstanding debt then the debts die also.

However PROBABLY won't be the case if there are any assets.....we had a situation recently where one of our relatives died leaving a loan on a car outstanding and as there was money in the estate, the loan had to be repaid.

I meant to add I'm sorry to hear of your situation....not only have you got the upset of your relative, you've got this worry as well

skylight

Debts are only paid by the debtor. I he/she dies then all their wordly goods become their estate (will or no will).

If there are funds or value to the estate, then creditors will be paid first out of the estate with the remainder divided by will or how the law states.

If there is not enough funds in his/her estate then the debts are written off as there is no way of paying.

HOWEVER! There are threads on here of people being harrased by creditors when someone dies. Its a very stressful time, but in their book, the best time to contact you and convince you the debt needs to be paid.

jenniferpa

You might also want to check what you "know" about personal loans (i.e. ones unsecured on real property). AFIK while debts and loans need to be paid off from any assets when the holder dies, if there are no assets, the debt and loan dies. I don't know how you go about distributing assets if there are some, but not enough to cover everything. Also, I Imagine that if the holder was married, there may be some issues there.

This link might help http://www.direct.gov.uk/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DebtsAndArrearsArticles/fs/en?CONTENT_ID=10013093&chk=GeJ8kQ

EllieB_2

There is only an issue for the spouse if it was a joint loan/agreement. If the loan was signed by the holder only then the spouse is not liable - however as mentioned above if there is any estate (money or property left from the deceased person) then the lender is entitled to claim from this esate.