help with mums debts & advice about house

susieanne

My mum owes alot of money on a credit card & large overdraft , both the debts are with Lloyds , lloyds have allowed her to pay a reduced amount every month , her and dad only get a pension and are paying more than half there pension to help reduce the debt . The fact is they will never pay the amount they owe off even if they live until they are 100 . They own there own home , there morgage is paid off . It is my mum who owes the money , she wants to know what will happen with this debt when she dies ? Could they make my dad sell the house to pay off my mums debts if my mum should die before my dad ? There house would be left to me & my sister when anything happens to my parents , would it be sensible for my mum & dad to sign there house over to us now ?

RAS

We need to know whether the house is held as a joint tenancy or as tenants in common.

susieanne

Sorry i dont know what you mean . My parents had a joint morgage and after 25 years there morgage is now paid off ,so there house is now theres . After they both die the house would be mine & my sisters but they are thinking of signing it over to us now even though they would still live in the house

RAS

Hi

You need to know the answer.

If it is a joint tenancy they own the house jointly and severally, which means that on the death of the first parent, the other still owns the whole house. If mum dies first, then the house does not form part of the estate and the debts do not have to be paid from the house. Any assets owned by the estate (solely in mum's name) would be used to pay the debts.

If they are tenants in common, then each owns a portion of the house and the creditors would expect their debts to be paid from mum's portion of the house, albeit they might wait until dad died.

if you do not understand they need legal advice and debt advice from a debt charity.

Do you parents have their pension paid into Lloyds?

snookey

Can they release some of the capital now to pay off the debts. Maybe worth looking into as a small mortgage may be easier to manage than a lot of other debts.
Im no expert though and Im sure others on the board can advise much better than I can.

susieanne

RAS wrote: »

Hi

You need to know the answer.

If it is a joint tenancy they own the house jointly and severally, which means that on the death of the first parent, the other still owns the whole house. If mum dies first, then the house does not form part of the estate and the debts do not have to be paid from the house. Any assets owned by the estate (solely in mum's name) would be used to pay the debts.

If they are tenants in common, then each owns a portion of the house and the creditors would expect their debts to be paid from mum's portion of the house, albeit they might wait until dad died.

if you do not understand they need legal advice and debt advice from a debt charity.

Do you parents have their pension paid into Lloyds?

Hi yes it is a joint tenency , both my mum & dads names are on the deeds . So say my mum died first , would the bank have to wait until my dad dies and make us sell there house to get back the money that is owed to them ?? my understanding from what you have said is the bank could not make my dad sell the house but after both parents have died they would expect me & my sister to pay mums debts off from when we sell there house have i understood that right ? so back to my origianal question , would it be worth both my parents signing the house over to us now ? my parents would still live in the house but on the deeds it wouldnt be there house

geoffky

The debt needs to be paid and they will know the house is paid for so they might go for a charging order on the house. get advice

getmore4less

susieanne wrote: »

Hi yes it is a joint tenency , both my mum & dads names are on the deeds . So say my mum died first , would the bank have to wait until my dad dies and make us sell there house to get back the money that is owed to them ?? my understanding from what you have said is the bank could not make my dad sell the house but after both parents have died they would expect me & my sister to pay mums debts off from when we sell there house have i understood that right ? so back to my origianal question , would it be worth both my parents signing the house over to us now ? my parents would still live in the house but on the deeds it wouldnt be there house

You cannot inherit debt.

As joint owners.

if mum dies then the house is dads and the debt get pad from the rest of her estate or get written off.

If dad dies then the house is mums and can/will be used to pay of the debts.

Signing the house over has potential consequences for care and bankruptcy since the transaction can be undone.