Credit card debt after death

bengal-stripe

Twiggy_34 wrote: »

Certainly I believe I'm right when I say that the credit card company has absolutely no claim on any physical assets previously held by your mum, or now held by your dad.

I'm afraid, you are wrong!

Physical assets are very much part of the estate. Nobody is talking here about a few old clothes or some cheap furniture. But if there is a valuable collection of something or other, the collection's value forms part of the estate and it is possible the collection has to be sold to raise funds for debts to to be paid.

dazza.mk

redpete wrote: »

A couple of people have said that "the debt dies with the debtor" without the necessary caveat "if there is nothing in the estate to pay off the debt".

If someone is not sure then they need to get advice from a qualified and independent person (i.e. not just someone you don't know on an anonymous forum, and not the company to whom the debt is owed).

Agreed, although re-reading the thread I think there was one person who said that it was written off in their instance, most other quotes said something along the lines of the debt is written off if the estate has no money.

Twiggy_34

bengal-stripe wrote: »

I'm afraid, you are wrong!

Physical assets are very much part of the estate. Nobody is talking here about a few old clothes or some cheap furniture. But if there is a valuable collection of something or other, the collection's value forms part of the estate and it is possible the collection has to be sold to raise funds for debts to to be paid.

Oh, I very much realise that they are part of the estate, but certainly wasn't clear on how it worked with regard to an unsecured debt. Having done a quick google search most money advice sites suggest that the debt does have to be cleared if there are sufficient funds in the estate to do so, and would suggest that those examples where the debt was simply closed down, the debtor probably held some kind of payment protection which covered the situation.

Who pays credit card debt upon death?

When someone passes away and leaves behind credit card debt, this would usually be paid off from their estate during the probate process. However, if there was card payment protection insurance that includes death cover, then this may be reclaimed from the insurance, not from the deceased's estate.
If nothing is left in the deceased's estate, the credit card company will usually write off the remaining debt. Unlike some other forms of borrowing, a credit card is taken out by an individual and thus the contract is with the deceased – it would not be transferred to the family.

antrobus

Faith177 wrote: »

Antrobus the same thing happened to my mum when my dad died in 1991 as happened with Battleaxe.

In fact my mum originally paid the money to Barclaycard out of my dads life insurance. She then read an article in the Sunday Post about 5-6 months later saying that the debt dies with the person.

She wrote to Barclaycard and they refunded the full money plus a bit extra as a sorry

My dad died suddenly at 28 had no will and a fair bit of debt

Yes, but your father died in 1991. The law changed in 2001 by virtue of the Insolvency Act 2000, so in the OP's circumstances where there is a "fully paid for house" the creditor could apply for an Insolvency Administration Order.

kingstreet

Any asset solely owned by the individual would pass into the individual's estate, on death. Any debt in the sole name of the deceased would be a debt on the estate too.

If the individual leaves no will, a relative has to take on the role of Administrator, the same as an Executor of a will, who establishes the estate's assets and liabilities and obtains letter of administration via the HMCS, the same as probate for an Executor. They then settle any debts and distribute the residue according to the intestacy rules.

http://www.justice.gov.uk/courts/probate

Small estates of less than £5k may not have to go through the process.

Going back to Death In Service cover, this is normally written in irrevocable trust and paid directly to the recipient named in the latest expression of wish and outside the estate for creditor and inheritance tax purposes.