Deceased Fathers Credit Card Debt and his Estate

daveshoelace

Hi everyone,

My dad passed away recently, we are currently sorting his estate out. His estate essentially consists of a house (fully paid off, in his name only) and a 6th of a business. No savings.

He has a credit card debt, not sure the amount yet but we think £5000ish.

My mother is going to inherit the estate entirely, Dad didnt have a will but thats what we have all agreed.

Now, regarding his credit card debt, I am aware mum does not inherit the debt but rather his estate does instead. Given that his estate consists of no money but equity in a house and a business, how do they go about reclaiming it? Do we have to find the funds from somewhere or because there is no actual cash available, should we write and try and get them to write it off?

Also, should they freeze the interest/reduce it?

many thanks as always

datostar

You should notify the CC company ASAP of the death and send them a certified copy of the Death Certificate. Standard procedure is then to advise the 'Personal Representative' of the amount outstanding, block the card from further use and refrain from charging further interest. You will also need Intestacy Letters of Administration from the Probate Service as the value of any house will definitely be over £5000. The Land Registry will not alter their records without being satisfied as to legitimate ownership. Depending on the value of the house it may not entirely go to your mother as intestacy rules provide for other related beneficiaries too.
Credit Card companies will usually wait 6 months or so before applying any pressure as they realise that estates do take time to sort out, but they do expect to be paid if there are assets in the estate. Realising them is not really their problem.

opinions4u

Standard procedure is then to advise the 'Personal Representative' of the amount outstanding, block the card from further use and refrain from charging further interest.

Barclays, for example, will continue to accrue interest in this situation.

dzug1

daveshoelace wrote: »

My mother is going to inherit the estate entirely, Dad didnt have a will but thats what we have all agreed.

That's not - at least initially - up to you to decide. There are intestacy laws which you have to follow.

OK there's a thing called a Deed of Variation which allows you in effect to write a will.

You would be better off paying a solicitor to draw up and explain it - it could create more problems than it solves.

I doubt if a CC company would write off a debt like this - a loan/mortgage on the house would be one way forward if you didn't want to sell.

daveshoelace

dzug1 wrote: »

That's not - at least initially - up to you to decide. There are intestacy laws which you have to follow.

OK there's a thing called a Deed of Variation which allows you in effect to write a will.

You would be better off paying a solicitor to draw up and explain it - it could create more problems than it solves.

I doubt if a CC company would write off a debt like this - a loan/mortgage on the house would be one way forward if you didn't want to sell.

Thanks to everyone for their input so far.

Just to clarify, everything else is in order regarding probate, deeds of variation, other bills etc etc. We have seen a solictor and are sorting it out, its just the credit card aspect I was wondering about.

datostar

opinions4u wrote: »

Barclays, for example, will continue to accrue interest in this situation.

Typical, may I say, of the organisation that is far more interested in selling its overpriced ITC Probate Service than releasing assets to estate representatives.

I recently dealt with an RBS Mint card held by my late father. They immediately froze the interest. Their service couldn't be faulted.

daveshoelace

Just wanted to update this thread and say credit it where its due to HSBC.

Most of Dads debt, £8500, was with HSBC. I spoke to a very nice guy there in the relevent department and first of all, he told me that they do not consider the house part of the estate if the widow is still living there, which was a relief.

I then sent them a letter detailing his other assets, basically shares in a family firm which we couldnt sell outside the family, and they have wrote back to say they are writing the debt off.

The man I spoke to said that HSBC have no interest in trying to push people to sell stuff, and that they were the ones taking a risk letting a 72 year old have this debt, so their attitude is to take the hit when something like this happens.

It was such a relief, I may well switch banking to HSBC as a direct result.

Xbigman

Wow. Good for HSBC. A nice bank for a change. A happy new year to you all.



X

kev.s

such a nice outcome for a change..

sorry for your loss also

chattychappy

daveshoelace wrote: »

I spoke to a very nice guy there in the relevent department and first of all, he told me that they do not consider the house part of the estate if the widow is still living there, which was a relief.

Just to clarify, was it owned entirely by your father (albeit left to your mother) or was it owned jointly?

If owned jointly (as "joint tenants" - which is the usual way) then the house would pass to your mother immediately on death by survivorship and never form part of the estate. It wouldn't be for the bank to decide that... As such, it wouldn't normally be available to pay off debts. If there is insufficient in the estate to pay off the debts then a creditor can apply to court for an order to recover, but this is only discretionary. Don't want to be cynical, but just wondering whether they really were so generous in the circumstances!

daveshoelace

chattychappy wrote: »

Just to clarify, was it owned entirely by your father (albeit left to your mother) or was it owned jointly?

If owned jointly (as "joint tenants" - which is the usual way) then the house would pass to your mother immediately on death by survivorship and never form part of the estate. It wouldn't be for the bank to decide that... As such, it wouldn't normally be available to pay off debts. If there is insufficient in the estate to pay off the debts then a creditor can apply to court for an order to recover, but this is only discretionary. Don't want to be cynical, but just wondering whether they really were so generous in the circumstances!

It was entirely owned by my Father, it was bought back at a time when the woman didnt usually have their name on the deeds, so it has been left to her.