Selling an inherited house - unsecured debt? - scotland

Caleb11

Hi

Wondering if someone can help me. I am selling my late fathers estate. He died in December 2009. The house is selling for £105k with 95k roughly owed on it with secured debt. He had quite a lot of unsecured debt. I received a few letters when he first died from the unsecured lenders saying the wanted to register their claim against the estate. I wasn't in the frame of mind to deal with it then and I though that the debt would have just died with him. He owes family members £15k but we are going to use the £10k left over and make repayments for the other £5k. What is the process? Is there a time frame that unsecured lenders can make a claim against estate? If they have made a claim will my lawyer need to pay them? What if there isn't enough money to pay it?
Thanjs

Thrugelmir

Are you a named executor of your late fathers estate?

After the secured debts are settled. Then unsecured debts should be settled in a pro rata manner if there is insufficient funds to settle in full.

Caleb11

Do I pay these even if there is not a claim against the property? What about family do they have a right to the money? I got a document of confirmation as my dad didn't have a will which from what I understand means I am exectutor. Will I ever be liable?

Annisele

Edit: asked a stupid question - OP has already said he's in Scotland.

This website gives some information about insolvent estates - but I'm not sure how up to date it is, or whether it applies to Scotland.

I don't know anything about Scottish law, but I think it's very unlikely that you'll be able to repay the family members and give nothing to the other creditors.

In England, if there isn't enough money to pay the creditors then they'd have to accept part payment. So, if the total debt was £40k and there was only £10k available to pay it, then each creditor would get 25p in the pound.

In England, the executor wouldn't be personally liable unless they'd done something they weren't allowed to do. So, if there were £40k of debts and £10k in the estate, and the executor gave that entire £10k to a beneficiary listed in the will, the executor might end up personally liable to the creditors. Not necessarily, but possibly.

Thrugelmir

Caleb11 wrote: »

Do I pay these even if there is not a claim against the property? What about family do they have a right to the money? I got a document of confirmation as my dad didn't have a will which from what I understand means I am exectutor. Will I ever be liable?

Suggest you seek professional advice.

Your responsibility is to contact all creditors and ascertain all the liabilities if the estate.

Let your professional advisor guide you to avoid making a costly mistake.

bris

If there is nothing in writing about money due to family members, then they will get nothing. Be very careful how you play this, creditors have six months to claim on the estate and you can't dispose of anything until this time is up. Remember you can pay the funereal costs from the estate before any creditors but that is all.
If you give any family members priority over anyone else you may find yourself liable for the debt, being an executor is complicated and if you get it wrong it can be your neck thats on the line. I would get some professional help if I was you.

Caleb11

Thanks for your replies. I will phone my solicitor later as well. I don't remember who these unsecured debts are with and how much he owes exactly but If I understand correctly they have 6 months from the sale of the house to make a claim otherwise I can use the money to pay family? Thanks

Caleb11

Also I don't know if this is relevant but I was making payments to both the secured lenders while it was on the market as they wrote to me threatening to repossess and that I would be liable if there was any shortage in paying off the debt. I paid £600 from my savings for 6 months. Do I get this back?

Caleb11

Also do I have a right to get back what I paid to put it on market? - home report ect? Pay lawyer from the leftover money? Thanks

getmore4less

be carefull I think the 6months may only apply if the coorect proceedures have been done.

If the house is the only asset and the gross sale at £105 with £95k debt there won't be much left.

This looks like an insolvent estate which most likley needs a different process than normal administration.

There is no requirement to act as executor and with insolvent estates is often best not to.

How far down the line are you?

getmore4less

X-posted

You need to get onto a iolicitor to handle this,

have you officialy applied to administer the estate.