Debts after death

stulaunch

Hi.
Father in law died recently, no will, no money but a few small debts.
The one I'm not sure about is a loan foe a caravan in hus name only, around £1700 left to pay.
We have cancelled all his direct debits and now in process of contacting all relevant people.
The loan us with what car? But we don't have any documentation on it.
My mother in law still has caravan. Can the loan company lay claim to the caravan and insist she sells it to clear the debt?

spacey2012

IMO :
Any assets that were his at the time of death are part of the estate and will have to be sold to pay off any debts.
If the assets do not meet the debts a percentage is divided up and each creditor gets a share of the pot.
The caravan will depend if the finance was secured on it or if it was a personal loan, if it was secured it belongs to the finance company until paid in full, if it was personal it is an asset and will have to be sold.
Funeral costs are first, any taxes owed second, debts third and anything left after this gets shared via the will or relevant next surviving blood relative.

AMILLIONDOLLARS

Was the loan taken out with a Bank, Building Society etc. does it have PPI attached to the repayments, in this instance the policy will clear the debt. Just contact them to find out. The Caravan may well be considered an asset by the company owed money.

The important part to remember is that, if the debt is in solely your Father-in-Law's name, your Mother-in-Law is not responsible for them. The companies owed money will have to claim against his Estate. This could mean money held in a single account, maybe an insurance policy. The law states that Funeral expenses be paid first before anything else. If there are no monies left after this, then the companies may have to write-off what is owed.

Car Loan - was there any payment protection linked to this, same applies above.

Joint loans your Mother-in-Law will be liable.
Joint bank account - the money automatically belongs to your mother in law.

No one leaves debts in a Will!

AMD

getmore4less

the claim is against the estate.

do not become administrator.
it will be up to the debt holders to do the jobif they want any money.

google insolvent estate there are few guides out there.

stulaunch

A quick update and a few more questions if anyone would be kind enough to read.

It has taken a while to sort out for work reasons and mother in law does not wont to go to CAB about it.

The caravan was on a secured loan, so they have given the options to either pay remaining £1700, give them the caravan to sell and clear debt with remaining back to the her/estate or carry on with payments, they will put in MIL's name.

Father in Law had other debts though, we have found £2700 on credit card, still waiting to hear from these, it went to their probate team.
£260 on another credit card, we have told them of death but they have asked for their money.

He had an insurance plan to pay for funeral. of around £4000. Now this was on some kind of funeral plan, we have noticed that it was made up of £3000 for funeral costs and £1000 of it was an insurance policy. We have used all £4000 to pay for funeral, including wake. Not sure if we've done the right thing by spending the insurance policy bit on funeral?

There is still no administrator! as getmore4less has advised, nobody intends to be administrators as there was no will.

Not sure where to go from here?
The options obviously to get rid of caravan to pay off secured loan but MIL is reluctant to sell now saying she wont get much for it at this time of the year,
If she carry's on paying installments, surely they can't put it in her name, as it should be part of his estate? and the other debtors will make her sell it? and she can't afford to waste any money.

Sorry for length of reply, but has anyone got any thoughts on how to move on this?

nom_de_plume

I believe you are correct in your thinking in that, if the caravan is worth more than the £1,700 owed, it should be sold to repay the loan and part of the credit card debt.

madbadrob

The difference here is that the caravan is a secure debt so technically still owned by the loan company. The fact there are other debts on the estate I would suggest it will have to be sold and the debts paid off and in this case I would say the loan company have first shout of the whole debt has they technically own the caravan.

With regards to administration your Mother in Law should be the one obtaining it and until she does then nothing can be sold anyway.

There is no requirement for anyone to get involved with administrating the estate however has there are known living relatives with an entitlement to the estate this will never get passed to Bona Vacantia and therefore your mother in law will lose out altogether. The loan company would foreclose and sell the caravan. If this was to happen there are chances they would take what ever excess there is in fees for repossession etc. Thus meaning what is possibly a solvent estate all be it with small amounts left and turning it into an insolvent estate

Rob

stulaunch

Thanks for replying Rob.
Am i right in thinking that we couldn't sell the caravan ourselves anyway unless one of us becomes administrator first?

I'll just add that mother in law is late 70's and disabled and can't cope or understand anything financial. Hence we want to sort this out as easily as possible.

madbadrob

No if you remove any of the assets from an estate prior to administration being granted you are breaking the law. As the MiL is in that way then your wife could apply for admon. Who deals with it after that is up to her but only children of the FiL after MiL can apply in your case

Rob

John_Pierpoint

Can we assume that the in-laws are living in rented accommodation?

stulaunch

John_Pierpoint wrote: »

Can we assume that the in-laws are living in rented accommodation?

Yes, they are in counci / housing association.