Loan and being terminally ill

Macblack

Hi,

Was hoping someone could give me some advice, my father in law has been diagnosed as terminally ill, he is 72. My wife and I have been helping sort out his finances.

He lives with his wife and daughter and they still have a mortgage on the house they live in (all 3 names are on the mortgage), they have some equity in the house but not much.

Last year he took out an unsecured loan for 7 years for £21,000 (total repayment would be £31,000).

Only his name is on the loan even though it comes out of a joint account. He has no life assurance policies of any sort.

There is no way his wife could pay this loan as she only receives state pension and a small private pension.

I can't believe that a high street bank would give a 71 year old an unsecured loan in the first place for such a large amount.

Has anyone had a similar experience who could give some advice on the options for this loan?

Thanks

Mac

bobajob_1966

What has he spent the money on? Is he able to afford the repayments now?

When someone passes on any debts would need to be paid from their estate.

LovelyLeeds

Macblack wrote: »

Has anyone had a similar experience who could give some advice on the options for this loan?

What on earth would a 71 year old want with such a massive amount of money? The lender has taken a huge risk. I'm sure your father was of sound mind when he took out the loan and subsequently used it for whatever reason, so I'm not sure what you mean when you say what are the options?
Debts are joint and several if married - your mother will need some serious financial advice.

Clive_Woody

LovelyLeeds wrote: »

Debts are joint and several if married

No they are not.

If this loan was in the husbands name only then only he is responsible for repayment of it. If he dies then his estate is responsible for covering the debt, if his estate did not cover the debt then his wife could not be chased for repayment as the loan is not her responsibility.

Macblack

Bobajob, I'm not sure what you mean by can he afford the payments now, his pension covers the payments now yes but he has a couple of weeks to live at best..

LovelyLeeds, he wasnt the best with money and he accrued a few debts over time he consolidated them with this loan.

Clive, the loan was in his name only. As I mentioned above the "estate" will be worth nothing as he had no life assurance policies and the home he lived in still has a mortgage with 2 other peoples name on it.

LovelyLeeds

Clive_Woody wrote: »

No they are not.

A bit black and white - I based my reply on this:
Married couples
5. Married couples are not liable for each other's debts unless both parties signed the agreement, or the debt carries a joint or several liability.
A creditor may ask the court to make an order against the husband for his wife's debt where she claims to have no assets particularly in the case of supply of necessities. The court might consider the wife to be trying to evade responsibility for goods or services supplied to, or used by the couple, and grant such an order. Legal advice is recommended in such a case.
Once obtained, a judgement may only be enforced against the assets or wages of the named debtor, but in practice, it may be difficult to distinguish each other's assets where goods are owned jointly. Legal advice should be recommended when one spouse seeks to disclaim responsibility for debts incurred by the other.
In practice, creditors should ensure a married woman's own credit-worthiness, or ask for her husband to be guarantor where she has no income of her own.

bobajob_1966

Macblack wrote: »

Bobajob, I'm not sure what you mean by can he afford the payments now, his pension covers the payments now yes but he has a couple of weeks to live at best..

LovelyLeeds, he wasnt the best with money and he accrued a few debts over time he consolidated them with this loan.

Clive, the loan was in his name only. As I mentioned above the "estate" will be worth nothing as he had no life assurance policies and the home he lived in still has a mortgage with 2 other peoples name on it.

The reason they gave him the loan was because he could afford it - I asked in case you wanted to negotiate the current repayments, you don't specify in the OP.

The bank may have a claim on his share of the house, depending on how the mortgage/ home ownership is arranged. Do you know if they are tenants in common or joint owners?

LovelyLeeds

Macblack wrote: »

LovelyLeeds, he wasnt the best with money and he accrued a few debts over time he consolidated them with this loan.

A sad time for you - I hope you can resolve things.

im_obsessed_with_mr_t

bobajob_1966 wrote: »

The reason they gave him the loan was because he could afford it - I asked in case you wanted to negotiate the current repayments, you don't specify in the OP.

The bank may have a claim on his share of the house, depending on how the mortgage/ home ownership is arranged. Do you know if they are tenants in common or joint owners?

the bank cannot claim an unsecured debt on home the only thing they may try to do is place a junction on any sale of the home ( i have had this done to be when i was younger) so the solicitors will not pay you any money from the sale of your home until this is settled. i dont mean to be unsimpathatic but is there a way to remove his name from the deeds of the home.

bobajob_1966

im_obsessed_with_mr_t wrote: »

the bank cannot claim an unsecured debt on home the only thing they may try to do is place a junction on any sale of the home ( i have had this done to be when i was younger) so the solicitors will not pay you any money from the sale of your home until this is settled. i dont mean to be unsimpathatic but is there a way to remove his name from the deeds of the home.

Do you mean a charge?

If ownership was transferred now the bank could still apply to place a charge on the property, as the motivation for the move be clear.

im_obsessed_with_mr_t

bobajob_1966 wrote: »

Do you mean a charge?

If ownership was transferred now the bank could still apply to place a charge on the property, as the motivation for the move be clear.

wasnt sure if you could do it or not it such a shame im reading in to it now seeing if there is any other way around it. but its not overly clear.

one thing i am sure of though is if you cant afford repayments you only have to pay what you can as long as you make a reasonable effort then there is little they can do