Ridiculous Loan

Spac3Monkey

Hi

My father-in-law past away a number of weeks ago and left me and his daughter as executors of his estate.

As part of his finances there was an outstanding Barclays Loan for £2900. After being chased constantly by Barclays Finance, we received documentation on the loan and the details were scary

Initial Loan Amount - £2900
Start Date - 9th Feb 2010
Loan Period - 120 months
Pay back amount - £61.47
Interest rate - 23.7%
Total Amount payable - £7376.40

This is a ridiculous about of money and Barclays continue to chase us for a total of £2800. I just don't understand why this value and they are not very helpful on the phone.

The estate assets are minimal and have to cover the cost of the funeral etc and very little will be left. Don't loans get written off when a person passes away. Or shouldn't they want back only the remainder of the capital loan which by my estimates should only be £1000

Any help or advice would be appreciated

Thanks

Craig

McKneff

Loans/credit cards/credit are the last on the list to be paid.

Funeral director first, then rent, council tax etc. (priority debts)

If there is nothing left, then yes, they will not get anything. If there is something left, I believe that they get paid proportionately.

My condolences by the way.

Spac3Monkey

Thanks for the response, what do you mean proportionality?

somethingcorporate

The total claims are added up and apportioned and then the remaining cash is split in these proportions and given out.

So say £5,000 was claimed against the estate: £3k (60%) from party A and £2k (40%) from party B.

If £2k was available to settle these debts and they had equal claims it will probably be split 60% of the available cash (£1200) to party A and the rest (£800 or 40%) to party B.

iolanthe07

Don't loans get written off when a person passes away.

No, they don't. They are paid off from the estate unless there are no funds, then they are written off. Don't let any lender try to use emotional blackmail to get you to pay any outstanding debt out of your own money - they will try this on occasionally.

If there are funds, but they are insufficient, then debts are settled as a proportion of what is owed, as somethingcorporate has posted.

_Andy_

Spac3Monkey wrote: »

Hi

My father-in-law past away a number of weeks ago and left me and his daughter as executors of his estate.

As part of his finances there was an outstanding Barclays Loan for £2900. After being chased constantly by Barclays Finance, we received documentation on the loan and the details were scary

Initial Loan Amount - £2900
Start Date - 9th Feb 2010
Loan Period - 120 months
Pay back amount - £61.47
Interest rate - 23.7%
Total Amount payable - £7376.40

This is a ridiculous about of money and Barclays continue to chase us for a total of £2800. I just don't understand why this value and they are not very helpful on the phone.

The estate assets are minimal and have to cover the cost of the funeral etc and very little will be left. Don't loans get written off when a person passes away. Or shouldn't they want back only the remainder of the capital loan which by my estimates should only be £1000

Any help or advice would be appreciated

Thanks

Craig

Your sums are incorrect in terms of what you feel the balance of capital is

http://www.amortization-calc.com/#loan-2900-10-23.7-2-2010-2

poppasmurf_bewdley

Have you checked the terms of the loan? Some loans contain a life insurance element which pays off the loan in the event of death. My last loan with a bank certainly had this clause but it was some time ago so things may have changed.

chesky

You can't inherit your father's debts, so if the estate can't cover it, tell them. Don't be bullied into thinking you have to pay it off on his behalf.

antrobus

McKneff wrote: »

Loans/credit cards/credit are the last on the list to be paid.

Funeral director first, then rent, council tax etc. (priority debts)

...

The order of priority is shown here - http://www.bereavementadvice.org/probate-and-other-legal-procedures/insolventestates.php - it doesn't look as if either rent or council tax are given any prority.

opinions4u

Spac3Monkey wrote: »

My father-in-law past away a number of weeks ago and left me and his daughter as executors of his estate.

As part of his finances there was an outstanding Barclays Loan for £2900. After being chased constantly by Barclays Finance, we received documentation on the loan and the details were scary

Initial Loan Amount - £2900
Start Date - 9th Feb 2010
Loan Period - 120 months
Pay back amount - £61.47
Interest rate - 23.7%
Total Amount payable - £7376.40

This is a ridiculous about of money and Barclays continue to chase us for a total of £2800. I just don't understand why this value and they are not very helpful on the phone.

Using blunt maths, £2900 x 2% a month x 34 months = £1,972 in interest.

£61 x 33 payments = £2,013.

So the debt will barely have changed as the payments are only very slightly higher than the interest.

The estate assets are minimal and have to cover the cost of the funeral etc and very little will be left. Don't loans get written off when a person passes away.

The link in the earlier post will assist you with this.

Or shouldn't they want back only the remainder of the capital loan which by my estimates should only be £1000

10 year loans at a high rate reduce slowly. And interest will continue to accrue even if payments stopped when the bank account was frozen.

The figure given by Barclays looks reasonable (in it's accuracy). The funds in the estate may not cover the debt though.

Save your energy on arguing over the amount. Work out what money there is and what money is owed. Pay for the funeral. Itemise your reasonable expenses as executor. See what's left over and settle up pro-rata, with a letter stating that the estate is insolvent.