Who pays the deceases debts?

aviii

a family friend who parents are recently pasted away - left some outstanding bank and credit card debts.
about £5000.


they have been told that THEY have to pay off this debt that was occurred by their parents and that the bank can force them to sell their parents home that was left to them to make this payment.


This debt was not secured against the house or any other property.


does this sound right ? as some one I knew, in a similar situation had the debt written off?

Mojisola

aviii wrote: »

a family friend who parents are recently pasted away - left some outstanding bank and credit card debts.
about £5000.

they have been told that THEY have to pay off this debt that was occurred by their parents and that the bank can force them to sell their parents home that was left to them to make this payment.

This debt was not secured against the house or any other property.

does this sound right ? as some one I knew, in a similar situation had the debt written off?

They don't have to pay off the debt but the deceased's estate does.

If they are the executors, then they will pay the bills using money from the estate. If the only way to achieve that is by selling the house, that's what will have to be done.

Angry_Bear

aviii wrote: »

a family friend who parents are recently pasted away - left some outstanding bank and credit card debts.
about £5000.


they have been told that THEY have to pay off this debt that was occurred by their parents

Note quite right, however ....

and that the bank can force them to sell their parents home that was left to them to make this payment.

Yes, this seems right. Any oustanding debt comes out of the estate before "assets" are distributed according to the will. The house was part of the estate, and (as I understand it) the creditors are within their rights to insist that any equity in the house be used to settle the debts.

LisaLou1982

Technically correct although i suspect put in a slightly different way.

As others have stated, the deceased persons estate is responsible for all debts. Therefore, any property, cash, investments they may have must be sold in order to pay off any outstanding monies due to other parties.

If your friend is due to inherit the house then they will either need to sell it, pay all debts due and then have the capital for themselves, or pay the £5k themselves and not sell the house.

PasturesNew

As has been said: Technically correct, but the terminology used is emotional.

Debts are settled from what the deceased owns, before what's left is distributed to people who inherit.

If there is not enough cash to settle those debts, then something has to be sold, or the relatives have to raise a loan to settle them.

IF that means the house has to be sold, then that's the way it is.

People only inherit "what's left over", not "what they expected".

DrivingMissDaisy

Yes this is correct, the deceased's estate will have to pay off deceased debts

silvercar

If they were joint owners with the parent(s), then they become sole owner and the house is outside the estate.

Mojisola

silvercar wrote: »

If they were joint owners with the parent(s), then they become sole owner and the house is outside the estate.

If they were joint owners, the house wouldn't have left to them in the will - they already owned it.

getmore4less

silvercar wrote: »

If they were joint owners with the parent(s), then they become sole owner and the house is outside the estate.

Even then the value(lost to the estate) is not save from creditors if the estate is insovent.

For IHT puropses is still valued as an asset of the estate.

maman

As others have said, selling the house would be the worst case scenario but surely for £5000 it needn't come to that unless OP plans to sell the house anyway. There are far less drastic ways of raising £5000.

meritaten

its against the 'estate' which of course includes any property. some good advice above which I wont repeat.