Credit Card debt after death

rach73

Hi all,
I desperatley need some advice, my farther in law died suddenly last week and now my mother in law is really worried what is going to happen to the debts.
He has a few credit cards, one of which he owes £4,000 on, the others are relativly small, they own the house together and have a few joint bank accounts, is she liable for this debt.
It was in his name soley, can anyone shed any light on this for us.
Thanks
Rach x

poppy_f1

any debts would have to be paid out of the estate i beleive

rach73

How would this come about then, when shes living in the house and still paying the morgage?
Does it mean that she will have to take on the debt?
Cheers
Rach x

lisyloo

Hi Rach,

My understanding is that joint accounts and property that's held as "joint tennants" do not go into the estate (if they held the property as "tenants in common" then it's part of your dad estate).

So one thing you need to find our was how the house was shared i.e. as joint tennants or tennants in comon.

Did your dad hold anything else in his estate?
For example car, jewelry, money in his name etc.

If he has an estate then the £4K should come out of his estate.
If there is nothing in the estate then your mother is not responsible for the debts.

What you should do tomorrow is call the company and ask them to freeze the account i.e. stop adding interest.
They will probably want to see a death certificate but they will probably be able to freeze it on your verbal instructions.

rach73

Cheers for that, we are so worried that it will effect the house, which she is terrified of losing,
He had his own business, but were not sure if this is worth anything.
Any advice is greatly appreciated
Cheers
Rach x

lisyloo

Hi rach,

If she extended the mortgage by £4K then that would cost approximately £20 per month.
Could she not afford that?

I know it's all a lot to take in at this time but if she can't afford the extra £20 per month then perhaps she should consider moving to a smaller house.
The advantages are that she would free up some cash, but also gas, electricity, water, house insurance and council tax will al be cheaper on a smaller house.

I don't know much about her situation but personally I'd rather live in a small space and have some cash to spare than roll around in a big house but be really worried and cash strapped all the time.

I appreciate that moving house is a lot for her to consider right now but longer term it may make sense.
Could any family help out short term to give her some time?

blondie7

Did your father in law not have a life policy so the mortgage would be paid off

paulinespens

get her to contact card company

I do know one well card company does have a department that deals with deaths give them a call see what they say.

uih039

Rach

The first point is that you must not panic about the credit card debt at such a difficult time. As stated above you should contact the card issuer and tell them what has happened. You should say something like "the debt will be paid when the estate has been dealt with". They may ask you to confirm in writing with a copy of the death certificate. Be sure to confirm that the account will be frozen and no interest will be charged - this is normal practice under these circumstances. This will give you some time to think about next steps - the credit card companies know that it takes several months to finalise estates and pay debts.

Once you understand your dad's financial position you will need to consider how to proceed. If he had sufficient money in bank accounts etc. then it would probably be best to pay off the credit card debt. However, you and your mum must not worry that she will lose the house. There is no way a reputable card company would take such drastic action. I am sure they will agree for her to pay a small amount each month until the debt is paid which would be better than increasing her mortgage. You should be honest with them and explain she is unable to pay without selling her house.

Hope this helps. I must add that the above is based only on my own general knowledge rather than personal experience - other readers may wish to confirm or correct my comments.

Andrew.

rach73

blondie7 wrote: »

Did your father in law not have a life policy so the mortgage would be paid off

The circumstances to my farther in laws death mean that the life policy on the morgage is void.
As you can see it has been a very difficult time for the family and we are really trying to help my mother in law sort out the financial side of things, which is not looking good at the moment

Rach x

HugoSP

I'm sorry to hear this.

I had a similar situation with my late mother' estate a few years ago. The CC company froze the interest and the debt was paid out of the estate as and when it was feasible to do this.