Legal aid loan

Porter171117

Hi, I wondered if anyone had any experience with the legal aid agency? My mum has recently passed away and she has an outstanding legal aid loan which has daily interest charged to it ( 98p a day) the loan is attached to her Home, however, we can’t sell her home as her partner is still living in it. The house will be ours when he dies but he may live ( hopefully ) for many years and it doesn’t seem fair that interest is still being added even tho she has died. None of us ( her children) can afford to pay the loan off until the house is sold! Thanks

Keep_pedalling

They have a charge against the house and this is a debt against estate so it is not simple going to be written off.

Are they currently aware of your mother’s death? I would be more worried about them calling in the debt rather carrying on with what seem rather modest interest payments.

Margot123

Keep_pedalling wrote: »

They have a charge against the house and this is a debt against estate so it is not simple going to be written off.

Are they currently aware of your mother’s death? I would be more worried about them calling in the debt rather carrying on with what seem rather modest interest payments.

The OP's question is: "I wondered if anyone had any experience with the legal aid agency? ", not how anyone would feel if they were in that situation themselves.

Hopefully someone will come along who has knowledge of how this works. Failing that, the OP can ask the relevant agency for advice.

Keep_pedalling

Margot123 wrote: »

The OP's question is: "I wondered if anyone had any experience with the legal aid agency? ", not how anyone would feel if they were in that situation themselves.

Hopefully someone will come along who has knowledge of how this works. Failing that, the OP can ask the relevant agency for advice.

What a bazaar response to my post. I never mentioned feelings, and if that was all the OP was asking then the only possible answers are yes or no. I doubt many would have experience of this exact situation, but plenty will have of secured debts on estates, and regardless of who the creditor is, the executors will have to handle it in exactly the same way.

In this case the debt could cause a real problem for the partner’s right to stay in the house, and I can see no reason not to make the OP aware of that, regardless of the actual question they asked.

Yorkshireman99

Porter171117 wrote: »

Hi, I wondered if anyone had any experience with the legal aid agency? My mum has recently passed away and she has an outstanding legal aid loan which has daily interest charged to it ( 98p a day) the loan is attached to her Home, however, we can’t sell her home as her partner is still living in it. The house will be ours when he dies but he may live ( hopefully ) for many years and it doesn’t seem fair that interest is still being added even tho she has died. None of us ( her children) can afford to pay the loan off until the house is sold! Thanks

You need to urgently speak to the lender. Nobody on here can know the details of the loan. Do it today.

Keep_pedalling

Yorkshireman99 wrote: »

You need to urgently speak to the lender. Nobody on hear can know the details of the loan. Do it today.

Agreed.

The lender is a government agency, and the rate of interest is 8%, which would indicate the dept to the estate is around £4,500. Hopefully by informing them of the death interest payments will stop, but it is very likely that they will be looking for the dept to be paid out of the estate once it has been wound up, which unless there are other assets in the estate could mean the house may need to be sold.

chesky

Keep_pedalling wrote: »

Agreed.

The lender is a government agency, and the rate of interest is 8%, which would indicate the dept to the estate is around £4,500. Hopefully by informing them of the death interest payments will stop, but it is very likely that they will be looking for the dept to be paid out of the estate once it has been wound up, which unless there are other assets in the estate could mean the house may need to be sold.

If that were to be the case, it would probably be worth the family members trying to get a bank loan to pay off the debt to avoid the agency trying to force an early sale.

TBagpuss

I don't think the interest will stop simply because your mum has died. Why would it? after all, the debt has not been repaid.
However, you can try contacting them to clarify:
e-mail - land-charges-enquiry at egalaid.gsi.gov.uk
Tel: 020 3334 6373


It may be that it would make sense for your mum's partner, or you and your siblings, so consider getting a loan at a better rate in order to clear off the debt - however, on the plus side, the 8% is simple interest, not compound, so only payable on the original debt, not on all the interest since.