Debt if parent dies

heatherw_01

If my mum died, would I be responsible for all her (large amount) of debt which she has with numerous companies?

She rents so the debt could not come out of there either.

Can anyone tell me if I would have to pay her debt?

Should she declare bankruptcy to make sure?

Help would be appreciated

oscar52

If she has no house and no assests, then her debt dies with her. No one can make you pay - you didnt sign the credit agreement and you are not responsible (the same applies to any authorised user on credit cards)

heatherw_01

Many thanks.

Are you 100% sure?

I could not afford to pay any of her debt and if there is a chance I would have to pay she would want to declare bankruptcy.

magyar

Some credit agreements will simply say they are written off when someone dies. Others don't and will have a share of the estate. If, as you say, you mother has no significant assets then they can't take yours.

lisyloo

If my mum died, would I be responsible for all her (large amount) of debt which she has with numerous companies?

No-one else is responsible for your mothers debts (provided they are hers alone and are not in joint names).

Can anyone tell me if I would have to pay her debt?

The estate would have to pay off her debt.
If there is nothing in it then the lenders would have to write off the debt.

Beware that some callous companies may write letter that imply other people should pay the debt. This is not the case. If worried get advice, but unless any debt are in joint names no-one else is liable.

Should she declare bankruptcy to make sure?

Not necessary (for this reason).
The only thing you need to be aware of is that you will not be entitled to ANY of her assets (because these should be used by the estate to pay off the debt.
So, for example if she had and jewelry which has sentimental value then technically it has to be sold to pay off the debt and family member cannot have it.
One way round this is for her to gift anything like that whilst she is still alive.
Gifts of less than £3K are entirely tax free.

heatherw_01

Thank you very much.

So as she has nothing to pay off the debt with, and no estate that they can take the money from, I am fine.

One of the companies she is paying off is a baliff. Does the same apply here?

immoral_angeluk

When my mum died in sept 05 she had quite a bit of debt. Some of the companies wrote off the smaller amounts once they'd seen the death certificate... and others made a claim to be paid out of a few insurance policies she had (ie her estate as she didn't have anything else.). Most just wrote it off though. It is not your responsibilty and if there is no estate to pay the debts with then they will be written off.

heatherw_01

lisyloo wrote:

Not necessary (for this reason).
The only thing you need to be aware of is that you will not be entitled to ANY of her assets (because these should be used by the estate to pay off the debt.
So, for example if she had and jewelry which has sentimental value then technically it has to be sold to pay off the debt and family member cannot have it.
One way round this is for her to gift anything like that whilst she is still alive.
Gifts of less than £3K are entirely tax free.

She is in large debt but has a small savings plan which she wanted to use to pay for her funeral (one of these life insurance plans) Would I not get that? Is she wasting her money using it?

oscar52

same applies to bailiff, the cant chase you for someone elses debt.

As for the jewelery mentioned above, unless its woth thousands, i would worry about it - no one will chase you for a £100 pound ring or necklace

oscar52

heatherw_01 wrote:

She is in large debt but has a small savings plan which she wanted to use to pay for her funeral (one of these life insurance plans) Would I not get that? Is she wasting her money using it?

If the plan is specifically for funeral expenses, then her creditors cannot touch it.

heatherw_01

She doesn't have anything of any value at all to be honest, other than that life insurance plan.

Many thanks, I feel reassured now

You are all so helpful!