Secured loan with a deceased Debtor

reece240692

Hi Guys,

Just to give an overview, my partner's mother passed away 3 years ago, to cut a long story short there's no more money left in the estate but we still have an approx. £1,500 secured loan from the HSBC which they keep chasing us for.

The issue is that the house now doesn't belong to my partner's mum's estate, so if we were to tell them there's no more money left in the estate, where do we stand with the HSBC, would they try to take the house or chase us personally for it?

sourcrates

Hi,


If it was a secured loan, then HSBC will have a charge on the house, which means, should it be sold, they will have there cut first.
You say the house is no longer in there estate, can you explain what you mean by this ?


If they have no charge on the house, they cant chase anyone else for the debt.

reece240692

sourcrates wrote: »

Hi,


If it was a secured loan, then HSBC will have a charge on the house, which means, should it be sold, they will have there cut first.
You say the house is no longer in there estate, can you explain what you mean by this ?


If they have no charge on the house, they cant chase anyone else for the debt.

What I mean is that the house was previously owned by my partner's mum, since her passing away we've arranged for the deeds to be transferred into my partner's name, but the debt is owed by my partner's mum's estate so I don't see how they still have security over the house.

tomtontom

Who is the executor?

How was the charge removed without the debt being satisfied?

You are aware that you/ the executor should not distribute assets before liabilities have been settled?

bouncydog1

If there was a debt secured on the house by HSBC which you say there was, this debt must be settled from the estate. The estate is not just cash in the bank etc. it includes everything owned by the deceased at the date of death.

The executor of the estate has a personal liability to settle all debts prior to distribution of the assets. If the executor has transferred the house (which was an asset) to somebody without settling the secured debt, then the bank will pursue the executor for the amount of the loan plus interest.

If your partner was the executor then he should get in touch with HSBC to arrange a payment schedule with them prior to them starting legal action I would think. You will get better advice on the debts probate and funeral board so think about posting on there.

Marktheshark

reece240692 wrote: »

What I mean is that the house was previously owned by my partner's mum, since her passing away we've arranged for the deeds to be transferred into my partner's name, but the debt is owed by my partner's mum's estate so I don't see how they still have security over the house.

You need urgent legal advice from a wills and probate solicitor.
The executor of this will is walking a tightrope straight to prison here.

Primrose82

reece240692 wrote: »

What I mean is that the house was previously owned by my partner's mum, since her passing away we've arranged for the deeds to be transferred into my partner's name, but the debt is owed by my partner's mum's estate so I don't see how they still have security over the house.

This shouldn't have been allowed to happen. Executors would have had a legal duty to have paid this charge - you cannot simply just transfer it and say it isn't now part of the estate !!

andyfromotley

Hi Reece.

You need legal advice, you cant just dispose of estate assets and say 'tough its gone'. It could have serious consequences.

iolanthe07

It sounds as if the estate has been distributed before all the debts were paid off. This is potentially very serious and you need some professional advice, IMHO.