credit card death and death

rose28454

my dad died 3 weeks ago and my brother and sister are sorting out his estate. he left everything to my mum which is about 15000 in the bsoc and an isa for about 3500 with his bank. the bsoc accounts were joint so now are in mums name. however he had abiut 1500 on his credit card and the bank wants to deduct this amount from the isa before they pay it out. Now my parents still have a 60000 mortgage ( thanks to bad business dealing my brother had) so am I right in thinking that the credit card debt has to come after other debts like the mortgage so they cant just take the money. Advice please

Tixy

Banks are allowed to offset debt in some circumstances when a person dies.

Whilst the credit card debt would come after funeral expenses and the mortgage presumably the house has equity in it? If thats the case then presumably his overall estate including the house will cover all his debts including the credit card debt?

YorkshireBoy

Tixy wrote: »

Whilst the credit card debt would come after funeral expenses and the mortgage presumably the house has equity in it? If thats the case then presumably his overall estate including the house will cover all his debts including the credit card debt?

I'm not 100% sure, but if mum and dad were joint tenants, as opposed to tenants in common, then the house passes through survivorship (and outside the will) to mum doesn't it?

Tixy

YorkshireBoy wrote: »

I'm not 100% sure, but if mum and dad were joint tenants, as opposed to tenants in common, then the house passes through survivorship (and outside the will) to mum doesn't it?

Not really an area I that 'up' on.
But if joint tenants then the house would pass over but then the spouse would also become liable to the whole mortgage, so then the mortgage isn't paid out of the remaining estate. And it sounds like the remaining estate would cover all the debts (unless there are other priority debts not mentioned).

And when joint tenants and the house isn't part of the estate then its still recommended to come to an arrrangement with the deceased creditors, as they could in theory apply for an insolvency administration order in order to access the equity from the house to pay off the debts. (http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093)
Whilst that doesn't directly relate to the issue of whether they are allowed to offset, it does mean that the credit card debt will very likely need to be paid at some point.

antrobus

rose28454 wrote: »

..he had abiut 1500 on his credit card and the bank wants to deduct this amount from the isa before they pay it out. Now my parents still have a 60000 mortgage ( thanks to bad business dealing my brother had) so am I right in thinking that the credit card debt has to come after other debts like the mortgage so they cant just take the money. Advice please

Google 'bank's right of offset'.

Banks are allowed to offset debt full stop. (In fact I believe everyone has the right of offset, not just banks). So long as the credit card debt is due and payable and both the ISA and credit card account were in the father's name then it will be offset. So yes, they can and will 'take the money'.