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Bank loans after death

7 replies 434 views
alanfouldsalanfoulds Forumite
1 posts
MoneySaving Newbie
I have a personal loan with £15000 left to pay on it and i have terminal cancer. The loan was taken out in a joint account but just in my name. I am still able to pay this at the moment but i am still worried that ths bank might take any money left in the joint account after my death. Where do i stand on this problem.

Replies

  • zx81zx81 Forumite
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    The debt will be payable from your estate, so it depends on how your finances are structured.  The bank won't just take any money from anywhere as debts need to be settled properly..
  • edited 22 May at 11:51AM
    sourcratessourcrates Forumite, Board Guide
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    edited 22 May at 11:51AM
    There is a clause in most financial agreements called a right of "set off".
    This allows the bank to take money from one account, and offset it aginst another account held by the same customer, and in the same capacity.
    This has been known to happen with joint accounts in the past, however, the FOS take a dim view of such procedures, and have upheld a lot of complaints in that area, but it does depend on the specific circumstances, and best advice is to try and avoid it happening altogether.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
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  • edited 22 May at 11:54AM
    macmanmacman Forumite
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    edited 22 May at 11:54AM
    Yes, if repayments stop and the account defaults, then the bank can usually seize money from any account in your name, joint or otherwise. However, that would not be done immediately. Will your estate have the assets with which to repay the loan after probate?
    You are of course quite free to move any assets to an account at another bank, in which case your lender will simply be another creditor.
    No free lunch, and no free laptop ;)
  • edited 22 May at 7:29PM
    sleepyjonessleepyjones Forumite
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    edited 22 May at 7:29PM
    Hey Alan, have you spoken to your bank?
    I know a couple of banks offer "Cancer Support Advisers", so in the first instance, I think would be to check if your bank has these services available.  If they don't offer this service then I'm sure they'll be helpful and sympathetic, it wouldn't be unheard of for them to remove all interest and help you with a better payment plan suited to your requirements. 
    Good luck, Stay strong!

    Edit : Just found this, which is pretty much exactly what I was talking about : https://www.macmillan.org.uk/about-us/working-with-us/corporate-partners/lloyds-bank.html
    *Good Luck * Be Lucky * Stay Lucky*
  • jonesMUFCforeverjonesMUFCforever Forumite
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    I must disagree with what Sourcrates has posted - IMO a bank cannot set off a debt in a sole name from a joint account.
    As long as the joint account is in credit as at date of death the bank should remove the deceased customer from it and retitle it in the name of the survivor.
    Now going forward again IMO the OP should write a list of his assets and liabilities. The first claim on any estate will be the funeral costs - then anything left over should be shared pro rata with all other creditors.
    If there is not sufficient funds to pay everybody then the estate is insolvent. Basically any unsecured debt will have to be written off. There is no liability on any family member to repay the debt.
    What goes around - comes around
    give lots and you will always receive lots
  • brisbris Forumite
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    Just a quick point to not, did you know you had terminal cancer when you took out this large loan?

    Thats a different ballgame as they will investigate this and will come after the money hard.
  • jonesMUFCforeverjonesMUFCforever Forumite
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    bris said:
    Just a quick point to not, did you know you had terminal cancer when you took out this large loan?

    Thats a different ballgame as they will investigate this and will come after the money hard.
    Take a minute to think about what you posted - IF and it is a big IF he did know about the cancer when he took out the loan - the perpetrator will be deceased and as the loan is unsecured, if there is no money in the estate to repay it will be written off. The next of kin cannot be held responsible and therefore will not be liable to repay. 
    What goes around - comes around
    give lots and you will always receive lots
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