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Loans and Death

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thebullsback
thebullsback Posts: 607 Forumite
Part of the Furniture 100 Posts Combo Breaker
What happens to unsecured loans and any other unsecured debt ie credit cards ect when the Debtor dies?
Keep in your thoughts the poor Beasts of burden around the World and curse All who do them harm.
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  • TadleyBaggie
    TadleyBaggie Posts: 6,638 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    They will settled from the estate assuming the estate has value.
  • JReacher1
    JReacher1 Posts: 4,661 Forumite
    Part of the Furniture 1,000 Posts Name Dropper I've been Money Tipped!
    I've always wondered about death in service payments from work. If I die my company will pay death in service of five times my annual salary to a named person.

    If I have a mortgage will the outstanding amount owed be taken out of this death in service payment?
  • sofiar
    sofiar Posts: 114 Forumite
    tends to be paid off from the estate
    -X-Missima-X-
  • Mojisola
    Mojisola Posts: 35,571 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    JReacher1 wrote: »
    I've always wondered about death in service payments from work. If I die my company will pay death in service of five times my annual salary to a named person.

    If I have a mortgage will the outstanding amount owed be taken out of this death in service payment?

    This usually goes directly to the named person and doesn't form part of the estate.
  • JReacher1
    JReacher1 Posts: 4,661 Forumite
    Part of the Furniture 1,000 Posts Name Dropper I've been Money Tipped!
    Mojisola wrote: »
    This usually goes directly to the named person and doesn't form part of the estate.

    Cheers. I've always thought this but I've never delved to deeply into it!
  • Mojisola
    Mojisola Posts: 35,571 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    JReacher1 wrote: »
    Cheers. I've always thought this but I've never delved to deeply into it!

    Best to check with your company!
  • pinkdalek
    pinkdalek Posts: 1,355 Forumite
    Tenth Anniversary 1,000 Posts
    Secured debts are repaid with the sale/transfer of property.

    Unsecured debts (in sole name) die with the debtor, no matter what you may or may not be told. Finance eg caravan/car, the lender can request to take back the asset or ask for someone to take on the debt.
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
    pinkdalek wrote: »
    Unsecured debts (in sole name) die with the debtor, no matter what you may or may not be told.

    I'm sorry, that's nonsense.

    The deceased's estate is liable for the debt.
  • Gaz83
    Gaz83 Posts: 4,047 Forumite
    1,000 Posts Combo Breaker
    pinkdalek wrote: »
    Secured debts are repaid with the sale/transfer of property.

    Unsecured debts (in sole name) die with the debtor, no matter what you may or may not be told. Finance eg caravan/car, the lender can request to take back the asset or ask for someone to take on the debt.
    Probably best to ignore this utter drivel, OP.
    "Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."
  • rtho782
    rtho782 Posts: 1,189 Forumite
    Part of the Furniture 1,000 Posts
    JReacher1 wrote: »
    I've always wondered about death in service payments from work. If I die my company will pay death in service of five times my annual salary to a named person.

    If I have a mortgage will the outstanding amount owed be taken out of this death in service payment?

    It depends.

    If you are able to nominate a person and they will receive it, in theory it's part of your estate and things like inheritance tax, debts, etc affect it.

    For this reason, few schemes work like this. Usually you nominate a beneficiary, and it is up to the trustees of the scheme to decide if they want to pay, and if so, to that person. In reality, they would always obey your wishes, but the fact that they are not bound by your wishes, means it's money going from the company to the beneficiary, not from you to the beneficiary.
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