bank loan

michaelfreedman

Hi
My parents took out a £10,000 bank loan with HSBC in 2015 , they were both 75 years old and never told us about it. They have now both sadly passed away, i know that HSBC are entitled to take the remaining balance from their estate, but I am confused by how two seventy five year olds on income support can be agreed such a big loan. They did not own a house and my mum and dad only had the usual pensions as income. I have phoned HSBC but got told that they passed the banks checks and told there is no complain possible. Is that correct?

michael

fwor

Do you have any reason to suspect that the bank has done anything wrong? Are there any signs that your parents were unable to afford the repayments on the loan?

In the absence of either of these, it appears just to be a loan taken out by adults of their own free will. As you were not present when the loan was taken out, you don't know what your parents told the bank about their circumstances and what they could afford to repay. So, from what you say, I can't see how you could have any evidence on which to base a complaint.

ReadingTim

You need more info about the loan before anyone can say whether there's grounds for complaint - whether it was secured or unsecured, the period over which the amount was borrowed, what your parents said their income was...

On the face of it, it seems strange, but if you had an income from a generous pension paying 2/3rds of final salary from a company you'd been with for 35+ years and only wanted to borrow for a couple of years, it's not impossible. You may also want to consider that your parents might have been a little forgetful or economical with the truth on the application form - the bank can't be responsible for that.

Finally, why do you think there's cause for complaint at all? You admit they borrowed it, so why shouldn't it be paid back? The bank shouldn't take the hit just because they've died, given there may be assets in the estate.

Or do you just feel that your inheritance should be at someone else's expense?

MataNui

What would you call 'normal pensions'? Also the bank are not 'entitled' to do anything. The estate must be settled legally and fully. If they didnt own a house then how much money is there in the estate?

The basic idea is the estate is valued (so property, belongings, insurances etc but not including policies with a named beneficiary). Funeral expenses can be paid from the estate and any outstanding tax debts. Then the balance is whats left to pay any other creditors like bank loans, utility bills etc. If there isnt enough to cover it all then each creditor has to accept a pro-rata share. The bank can not simply take anything.

PeacefulWaters

Pension plus income support and minimal outgoings suggests an affordable loan.

BorisThomson

Income support would not be available for pensioners in 2015. Do you mean Pension Credit? If so they'd have their rent and council tax paid, and a minimum income of £230 per week between them. That's a pretty healthy amount when housing costs are covered.

Do you know what they spent the money on? It could be that the loan was to pay off debts with higher interest rates.