Debt after death

Prudent

I am looking for a bit of advice please. I am helping a friend with her finances following the very recent death of her husband. I want to check my understanding of what happens to certain debts after death.

My friend and late husband own the property they live in. There is a small mortgage and a larger secured loan against the property. The remaining equity is about £35,000. There is a further debt of about £15,000 for a car loan. My friend has given the car back to the finance company and she thinks they will make around £10,000 selling it at auction. There are some further assets (savings, stocks and shares etc) which I think will be around the £8-9,000 mark.

My question is about the car loan which was solely in her late husband's name. My understanding is that the balance (£5000 ish) will be payable out of the estate. My friend saw a CAB adviser today who told her that she should ignore the balance on the car loan as it will not need to be repaid. She says she was told to ignore all calls and letters from the company. Does anyone know if this is correct? They had only owned the car for a couple of months if this is relevant.

stclair

Debt in the sole name needs to be paid from the estate if there is one available.

https://www.moneyadviceservice.org.uk/en/articles/dealing-with-the-debts-of-someone-who-has-died

Also this thread may need moving to the probate section so you get better responses.

Prudent

Thank you That was my understanding, although I don't know how to proceed from here as she is taking CAB's advice as correct.

stclair

Prudent wrote: »

Thank you That was my understanding, although I don't know how to proceed from here as she is taking CAB's advice as correct.

The can be useful in some instances but they are not professionals and mainly run by volenteers. But to tell someone to ignore letters etc is totally disgusting in my opinion.

MataNui

CAB advise is normally pretty accurate. Perhaps she misunderstood? The CAB adviser may have said 'She' doesnt need to pay it (which would be correct) and she took that to mean it doesnt need to be paid (which is not correct).

Anything in his sole name will need to be paid out of the estate if there are funds available. This is after other costs and funeral expenses. If there is not enough to cover all debts then she would need to write to the creditors and make an offer proportional to the debt and money available to pay.

getmore4less

THere is a complication as there is house, if the hoise is joint tenants the wife becomes sole owner but that does not stop creditors making a claim against it.

If tenants in common then there is value in the husbands estate.


Check the T&C of the car finance carefully a bit late but just handing it back may not have been the best option, but is often the least stressful.

girlsmum

when my dad passed, we just wrote to his creditors on behalf of my mum to advise them, said there was no money in his account at that time and they did not peruse any further, not saying that they wont as in theory they could make a claim against the house, but if the debt is small they may not bother.