Debt after death

Alassia

Apologies to everyone but I'm trying to find my way around.

I posted this on the credit card thread and then thought that perhaps the wrong place. I'm sorry for any duplication but my head isn't clear at all.

My husband died suddenly 10 weeks ago. I have paid for the funeral and am trying to sort out everything with the tax office.But, while trying to cope with the shock, an additional nightmare is the bank.There are two issues and I don't know how to deal with them

1. My husband was the sole person in a limited company. Over the past few years the company accrued a debt of 20,000 pounds.The bank have now asked me to take out an additional loan to pay this back although I was not involved in the company in any way. It wasn't a business loan but a 'business current account', if that makes sense to anyone? I can't afford to pay any additional loans from the bank and I didn't sign the forms they offered me. But I'm scared.

2. My husband also had an overdraft on his personal account and this is accruing interest each month, as well as maintenance charges, while I'm trying to sort out everything else.

It seems to be spiraling out of control - or, perhaps, I'm spiraling out of control.

Can anyone please advise?

Th1984

Didn't want to read and run, but until someone who has dealt with this the,selves comes along, maybe http://www.direct.gov.uk/en/moneytaxandbenefits/managingdebt/debtsandarrears/dg_10013093
Can give you something to read through?

Good luck.

AppleMatt

Alassia,

I haven't got any reliable answers for you, but I couldn't not reply after reading your message. Especially as we are both up late

I'm saddened to hear of what you're going through, I know your pain.

I'm no expert.. but something tells me the personal debt should be covered by the estate. As for the business account, did the company have insurance at all that may cover this?

A limited company is limited in the fact that directors have limited, or no, personal liability for losses the company makes. I am not 100% sure, but I would believe this covers debts too. The company owes it, not your husband, and certainly not you.

The bank is acting abhorrently by suggesting to take a loan to cover this. Could you name them, please?

I'm sorry I can't be more helpful, but if you need a can't-sleep talk to a stranger any time, send me a private message. I'll be awake

x

chattychappy

Really sorry to hear your news, is it keeping you awake? I'll just write something brief hopefully to tide you over.

The normal rule is that a limited company is a separate legal person. Only if your husband had personally guaranteed any loans/debts can there be recourse to his estate OR if the "business current account" was, in fact, his account rather than belong to the company's name. (What does it say on the cheques?)

If they have a claim on his estate, it gets more tricky. Debts are paid out of the assets of the estate. You can't be expected to make up any shortfall. But if, say, he had a share of a house that you wish to keep (or a car or any asset) then you might be expected to "purchase" these from the estate at a true value in order to pay the debts.

Houses can be complicated. Normally jointly owned property passes by survivorship. This means it passes outside of the will and never forms part of the estate. In this case the creditors (in this case the bank) can't claim on it without a court order.

But it depends exactly how the property was held and, of course, whether your husband used it as security for the bank.

So perhaps you can clarify a few points... In the meantime, don't be panicked into agreeing to what the bank are asking for.

PS are you the executor/administrator?

chattychappy

AppleMatt wrote: »

Especially as we are both up late

Looks like four of us!

sharpy2010

chattychappy wrote: »

Looks like four of us!

Five!

Sorry to hear about the loss OP, but I hope that things become a bit clearer for you shortly x

Alassia

Aw, thank you all so much, for replying.

I'm still awake - and I'm 2 hours ahead of you because I'm in Cyprus. Hope you're all fast asleep now!

Thank you, TH1984 and Sharpy2010, for your kindness.

The legal system here is based on English law and that's why I've asked you for help.

AppleMatt, Marfin Laiki bank didn't require any insurance when the business was set up; they wanted business themselves at the time
.
Chattychappy, there was no personal guarantee by my husband and the account/cheques etc are all in the name of the limited company...I have applied to be executor, but it takes ages here.

We didn't have mortgage insurance. We couldn't afford the extra 150 euros per month which the bank wanted to charge ( I know, this was bad judgement on our part but it was impossible on our earnings) Our house is mortgaged in my name- my husband acted as guarantor- and I still have 85,000 euros to pay at a rate of 1,000 euros per month for the next 10 years. The house is now worth what we paid for it 10 years ago: 170,00 euros - but nothing is selling here.

So, my husbands 'estate' is in debt to the bank.

By budgeting very strictly strictly I think I can manage the repayments on my own. However, if I'm off sick and can't work for any reason, it's all 'kaputt'! And, even so, there's no money left to pay the other bank debts.

I don't know what to do. I don't think I can just hand the property back to the bank? - and I don't really want to because I'd be homeless.

Should I try to pay off my husband's personal overdraft since the interest is increasing every month? It's not going to go away and will only get worse, I think.

Sorry if I'm rambling but I'm so confused.

dzug1

Alassia wrote: »

Should I try to pay off my husband's personal overdraft since the interest is increasing every month? It's not going to go away and will only get worse, I think.

Sorry if I'm rambling but I'm so confused.

If I've understood what you've said correctly (and I may not have done) then do NOT try to pay off his personal overdraft. It WILL go away when the bank understand the situation correctly. Which yes may be a struggle to convince them. If you try to pay it off it may be viewed as accepting the debt.

jonesMUFCforever

As you are in Cyprus I respectfully suggest that as nobody on here is an expert on Cypriot law even if based on English law that we cannot help you here.
My advice is to get local legal help.

CLAPTON

You really need local help from people who understand Cypriot law; even if it is similar to UK law there may be many important differences.

In Uk law it would be very important to identify your OH's debts and his assets which make up his estate.

Anything solely owned by you has nothing to do with his estate

However you really need people with specific knowledge of local law.

chattychappy

I think we can trust the OP on the Cypriot/UK law thing. Everything is with the proviso that the law could be different there. Indeed everything is with the proviso that you can't get proper legal advice on a forum anyway. Nobody knows who is who anyway. I say I'm a lawyer, but I could be an unemployed lighthouse keeper.

When I was at law school (which could also be a lie) there were a number of Cypriots training there and would later practise in Cyprus. I can imagine that in the area of wills/trusts, the law there might not have moved on much, but I really don't know.