Card holder died and Barclaycard still want paying :(

TBC

Hi all,

Just a quick one, my father inlaw unfortunately passed away some days ago and we are trying to sort out the financial affairs.

We have sorted out the HP on the car as he had insurance on the loan, Capital one is sorted as he also had card insurance on that, the mobile phone again is all sorted but we have a problem...

The mortgage was NOT covered so that is to carry on but we worked out that his life insurance policy should cover most of that... why's this is the credit card section then???

He had a card with Barclaycard and had a total of £3030.23 outstanding... they told him when he opened the account that the Capital One protection would also cover the Barclaycard but they now say that it doesn't and obviously we can't prove what was said.
He was the sole card holder and the account was only ever in his name but they sent a letter today that says that the debt is a liability on the estate and that they are freezing interest for 3 months during which the account should be payed in full......

I thought when you died all debt was cancelled... do we really have to pay this or can I send a letter back telling them to get stuffed (nicely of course)

skylight

No - debt is not cancelled - common misconception.

Barclaycard do have a legal right to claim on the estate for the outstanding debt. The life insurance forms part of his estate, so they are right in what they are telling you.

However, if there is nothing in the estate, there is nothing to pay the credit card company, THEN the debt will have to be cancelled - regardless of what you maybe told, neither the family (nor ANYONE else) is liable for the debt of the deceased.

What I cannot tell you is how the life insurance will be split up (who comes first with cliams on estate etc). You need to speak to the CAB or solicitor - I am assuming that he has no will and therefore no executor. If this assumption is incorrent, then contact the executor. This is his problem.

TBC

ahhh !!!!!!.....

They reason I was asking and seemed to miss out is that my mother inlaw is still with us... She is looking at a payment of about £35,000 on the life insurance.

From that she will have to pay of the Barclaycard and one other totaling £7060, then she would be able to pay £28,000 into her mortgage leaving her with £20,000 left on her mortgage.
I was hoping we could get her a into a bit of a better position than that but it doesn't look like it

Oh well, suppose I better start the ball rolling at getting the charges refunded and then make them a reduced offer......

AMILLIONDOLLARS

A bit strange I know you can't ask him now, but why did he not take out insurance to cover his mortgage, normally the building society insist on this, and in the event of death the mortgage is paid off and the house reverts to the surviving spouse in ownership.

Have you contacted his mortgage providers, there might be a policy hanging around somewhere, find out if they had an endowment with life cover, if it was a repayment mortgage, the building society would have most certaintly insist of there being a policy.

Good luck

TBC

definately no insurance policy, the mortgage lender confirmed. He declined taking the policy out because they wouldn't cover the mother inlaws artheritis

lisyloo

Just another thought.
Was he retired or working?
If he died prior to retirement but had some private pension plans then they should pay out something.
Sometimes this is in a form of a lump sum and other times it's a pensions to the dependents (in this case the wife).

MarkyMarkD

TBC wrote:

definately no insurance policy, the mortgage lender confirmed. He declined taking the policy out because they wouldn't cover the mother inlaws artheritis

He's got confused somewhere along the way ... arthritis isn't going to prevent anyone getting life cover. It might make a difference to the premium (although I'm surprised it would even be that significant an impact on that). He probably meant payment protection insurance, which wouldn't cover someone who might become unable to work due to a pre-existing condition.

The Capital One story also frankly makes no sense at all, unless he meant (and I expect this is what he meant) his CARD PROTECTION policy taken out with his Capital One card which would of course cover any other credit card - but is NOT insurance against death or sickness, but merely a single point of contact when the card is stolen/lost and very limited fraud protection cover in those circumstances.

Without being offensive to your deceased relative, it sounds like he gets his insurances confused rather easily and consequently ended up in this unfortunate situation.

TBC

MarkyMarkD wrote:

He's got confused somewhere along the way ... arthritis isn't going to prevent anyone getting life cover. It might make a difference to the premium (although I'm surprised it would even be that significant an impact on that). He probably meant payment protection insurance, which wouldn't cover someone who might become unable to work due to a pre-existing condition.

What it was was that they told him that if she had to stop working due to the arthritis then they wouldn't pay out. He therefore decided it was pointless.....

The Capital One story also frankly makes no sense at all, unless he meant (and I expect this is what he meant) his CARD PROTECTION policy taken out with his Capital One card which would of course cover any other credit card - but is NOT insurance against death or sickness, but merely a single point of contact when the card is stolen/lost and very limited fraud protection cover in those circumstances.

So what insurance did he take out with Capital One that made it so they just closed the card accounts once informed?

Without being offensive to your deceased relative, it sounds like he gets his insurances confused rather easily and consequently ended up in this unfortunate situation.

Don't worry to much about that, hindsight is a wonderfull thing but at his age you don't really expect to use life insurance...... Thanks for your input so far

towseriv

The amounts dont sound huge in comparrison? Surley you could pay as much towards the mortgage as possible and tell the credit card companies there is nothing left? This is not going to be lying and if they do ask about a house or anything then it is half you mother in-laws for one and I dont see them harrasing a bereved widow?

Not suggesting anything illegal just perhaps a little immoral

Bossyboots

towseriv wrote:

The amounts dont sound huge in comparrison? Surley you could pay as much towards the mortgage as possible and tell the credit card companies there is nothing left? This is not going to be lying and if they do ask about a house or anything then it is half you mother in-laws for one and I dont see them harrasing a bereved widow?

Not suggesting anything illegal just perhaps a little immoral

Whoever deals with a deceased's estate is under a duty to deal with it correctly or they could be held liable personally for any losses incurred to creditors or beneficiaries. However, the mortgage is the primary debt and should be paid, even before the funeral expenses. http://www.clsdirect.org.uk/legalhelp/leaflet10.jsp?section=13&lang=en

The other debts then fall to come out of the estate. In this case, a half share of the equity in the property. Even if the money is all put to pay off part of the mortgage, they credit card company can simply go after the house and if necessary place a restriction on it meaning they will have to be paid off at some future date when the house is sold. As they will undoubtedly be charging interest on the amount until they are repaid, it would be cheaper in the long run to pay it off and incur interest on a mortgage which will be at a lower rate.

Dr.Shoe_2

Isn't it the case that secured loans (mortgages) take precedance over unsecured ones (credit cards)?