Debt after death

Mands

Alassia wrote: »

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.

Alassia,

I'm very sorry for your loss. Dealing with this whilst trying to grieve must be incredibly difficult.

In practical terms you must have a Cypriot lawyer assisting with the will and probate, yes? By law you must use a lawyer to execute a will in Cyprus. Talk to them and see what they say; whilst the law is broadly based on UK law it isn't close enough to allow you to work from what would happen if you were in the UK.

In the meantime it would be worth switching your personal account from Laiki to another bank. It'd be a great shame to understand what can be done only to discover that they've emptied your account.

Best of luck in getting this resolved,
Mands

Alassia

[FONT=&quot]I eventually managed a couple of hours sleep and have read through your responses.Thank you, everyone, for taking the time to reply. A major difference in Cypriot law is that property in Cyprus does not pass by survivorship of husband or wife in the same way that it would in the UK and, in order to get the property into a sole name, probate must be applied for. This is being processed - but I’ve been told this could take up to two years.[/FONT]

[FONT=&quot]In the meantime, and this is my major worry, the debts are there and will continue to grow. My husband’s personal account has been closed but the overdraft is accruing interest and maintenance fees as is the company account which has also been closed. In two years time, if I do nothing, the debts will be even greater.[/FONT]

[FONT=&quot]I’ve been advised that it would not be in the bank’s interest to come after my husband’s share of the property since it’s a lengthy process (up to 15 years) and they would have little to gain. The loan for the property is with the same bank.[/FONT]

[FONT=&quot]But I don’t trust them![/FONT]

[FONT=&quot]My personal account is with another bank (thanks for the advice anyway, Mands. Although they asked me to transfer my account, I never did, thank goodness)[/FONT]

[FONT=&quot]I had intended visiting the bank this morning to see if I could do something, initially, for my husband’s personal account but have put that on hold for now. I‘ll need to give it more thought.[/FONT]

brianexpert

AppleMatt wrote: »

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

All good points, Sorry to hear about your lose.. Stay strong!

jonesMUFCforever

Alassia wrote: »

[FONT=&quot]I eventually managed a couple of hours sleep and have read through your responses.Thank you, everyone, for taking the time to reply. A major difference in Cypriot law is that property in Cyprus does not pass by survivorship of husband or wife in the same way that it would in the UK and, in order to get the property into a sole name, probate must be applied for. This is being processed - but I’ve been told this could take up to two years.[/FONT]

[FONT=&quot]In the meantime, and this is my major worry, the debts are there and will continue to grow. My husband’s personal account has been closed but the overdraft is accruing interest and maintenance fees as is the company account which has also been closed. In two years time, if I do nothing, the debts will be even greater.[/FONT]

[FONT=&quot]I’ve been advised that it would not be in the bank’s interest to come after my husband’s share of the property since it’s a lengthy process (up to 15 years) and they would have little to gain. The loan for the property is with the same bank.[/FONT]

[FONT=&quot]But I don’t trust them![/FONT]

[FONT=&quot]My personal account is with another bank (thanks for the advice anyway, Mands. Although they asked me to transfer my account, I never did, thank goodness)[/FONT]

[FONT=&quot]I had intended visiting the bank this morning to see if I could do something, initially, for my husband’s personal account but have put that on hold for now. I‘ll need to give it more thought.[/FONT]

Your post clearly shows there are major differences between UK and Cyprus when it comes to dealing with assets/liabilities of a deceased person. This confirms what I thought - you need a Cypriot equivalent of this site.
My condolences.

Alassia

dzug1 wrote: »

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.

Hi dzug1

I don't understand? I thought I had to accept the dept? Have no idea how I could convince them otherwise.

(BTW, this bank has branches in the UK and supposedly operates under the same groundrules, here and in the UK)

Alassia

jonesMUFCforever wrote: »

Your post clearly shows there are major differences between UK and Cyprus when it comes to dealing with assets/liabilities of a deceased person. This confirms what I thought - you need a Cypriot equivalent of this site.
My condolences.

Hi,

Thank you for your condolences.

Are you saying the banks act differently in UK? That they may have a different code of conduct? Admittedly, we don't have a financial ombudsman here as you do in UK - and that may make a difference but I don't think it should. The literature from the bank, which operates both here and in the UK, appears identical in both countries. Is there something I may be missing?

Sorry if I appear to be incredibly dim.I'm not usually so confused.

zerog

Alassia wrote: »

Are you saying the banks act differently in UK? That they may have a different code of conduct?

Of course. A bank has to follow the law in the country it is operating in.

When a person passes away, I would expect a bank upon receiving satisfactory proof of death to freeze all accounts (including joint), whether in debt or credit, until the executor begins to deal with the estate.

Whether this happens in Cyprus, or whether it is what should happen in Cyprus and has not happened in your case, is a matter for you and your lawyers to find out.

Law in most US states is also based on English common law, but I wouldn't expect an Englishman who has never been to the US to be able to help with this kind of matter.

dzug1

Alassia wrote: »

Hi dzug1

I don't understand? I thought I had to accept the debt? Have no idea how I could convince them otherwise.

(BTW, this bank has branches in the UK and supposedly operates under the same groundrules, here and in the UK)

I thought you said this was an overdraft on his personal bank account. If so (in the UK at least) it would be nothing to do with you.

If it's a joint account it's not his personal overdraft - it's a joint overdraft, so yes you would be liable.

You do need to be clear on what's joint and what is individual. Maybe you are, but (understandably in your situation) are not expressing it very clearly.

Anthorn

Sorry to be blunt here and sorry for your sad loss;

There is no debt after death unless a dead person can get credit. All additions to the original debt such as interest and penalties stop at death. Debts owed by the deceased are paid out of the estate after reasonable expenses such as funeral expenses. The estate consists of everything the deceased owns and also insurance payouts.

If there is not enough in the estate to pay the debts then they don't get paid except in the case of joint debts in which case the other party pays their proportion of the debt. i.e. if two people jointly are responsible for the debt then they will pay half.

Get yourself a lawyer who knows what s/he's doing.

opinions4u

Anthorn wrote: »

There is no debt after death unless a dead person can get credit.

Except there is. The debt is the responsibility of the estate. In the case of joint debts, the survivor usually takes on responsibility for the whole debt.

All additions to the original debt such as interest and penalties stop at death.

While some lenders may freeze interest there is no compulsion for them to do so. The estate remains responsible for debt, interest and maintaining payments.

Debts owed by the deceased are paid out of the estate after reasonable expenses such as funeral expenses. The estate consists of everything the deceased owns

Seems about right.

and also insurance payouts.

This isn't necessarily the case. Joint policies and policies held in trust do not form part of the estate.

If there is not enough in the estate to pay the debts then they don't get paid except in the case of joint debts in which case the other party pays their proportion of the debt. i.e. if two people jointly are responsible for the debt then they will pay half.

A joint debt will pass in its entirety to the survivor.

Get yourself a lawyer who knows what s/he's doing.

Preferably a Cypriot one.

Your post, while perhaps well intentioned, is a shocker under British law.