Sorting out debts after death

beavere38

I'm in the very early stages of sorting out a relative's estate. I found a debt owed to Moorcroft which is around £15k and was being paid off at £10 per month with no interest being charged. I believe it was originally a credit card debt.
I sent them a picture of the death certificate electronically to notify them of the bereavement and they have written back by email thanking me and saying that they will now close the account with them and return it to their client.
I have no experience of debt and debt recovery firms, I had assumed the credit card company would have written off the debt and sold it on at a reduced price to a company like Moorcroft.
I will wait and see what happens next, I'm just wondering if I will hear from the original lender now asking for the full amount owed to them originally? If so I am also assuming they can't charge interest on it especially at credit card borrowing rates?

lisyloo

If the debt is owed then why wouldn’t they ask for it back? Unless it’s too small an amount to bother collecting.
if you haven’t found any paperwork in the house and you are administering the estate then you should ask for all for all the details of the agreement with the credit card and moorCroft to satisfy yourself as to what is actually owed. It sounds like there was some agreement, possibly an IVA? (Voluntary agreement). I don’t believe they can just decide to charge exorbitant interest. The best thing to do is to communicate with them as both parties desire it to be settled. I would also want something saying whatever is agreed is “full and final settlement”

Mojisola

beavere38 said:

I'm in the very early stages of sorting out a relative's estate. I found a debt owed to Moorcroft which is around £15k and was being paid off at £10 per month with no interest being charged. I believe it was originally a credit card debt.
I sent them a picture of the death certificate electronically to notify them of the bereavement and they have written back by email thanking me and saying that they will now close the account with them and return it to their client.

As the debt was being paid off with such a small amount, it sounds as if Moorcroft have decided there won't be enough in the estate to make it worth pursuing.

beavere38

Thanks I am not trying to avoid repaying a debt by the way, I am just wondering what will happen next. 
I found an article describing what Moorcroft actually do here:
https://www.moneyadviceonline.co.uk/debt-advice/debt-collectors/moorcroft.html
In one section it states: "Moorcroft basically bulk buy or chase "bad debts" off finance companies and collect defaulted accounts on behalf of Scottish Power, BT, O2, United Utilities and others.
They buy the debt for a few pence in the pound and then chase the debtor for the full amount. This was if they get 20% of the people they chase to pay, they have doubled their money." 
I don't understand what is happening. Sounds like they bought a debt but are now telling me they are closing the account with them and returning it to their client. I thought they would have relished the chance to collect the full amount owing if they paid perhaps 10p in the pound for it originally. Maybe I just wait and see who gets in touch. 
I found a letter from 2017 with a Halifax logo top left and "Moorcroft Debt Recovery" and Moorcroft's address top right. It mentions the creditor Bank of Scotland and the account number is 16 digits long and looks like a credit card number. The amount is just over £15k. I think the debt actually goes back to about 2012 when the deceased seemed to run into financial problems.
I'm very confused, is this a Bank of Scotland credit card debt being chased by Moorcroft in conjunction with the Halifax?

beavere38

I've found some more paperwork now so things are becoming clearer. In 2009 there was a Halifax credit card ending XX55 with a balance of £15k. In December 2018 there are letters from both the Halifax and Hoist Finance UK Holdings informing the deceased that all the "rights, interest, benefit and entitlement" in respect of that account were being assigned to Hoist Finance. It also says the deceased should continue to deal with Moorcroft so I think Moorcroft were just collecting on behalf of the Halifax then later on behalf of Hoist. I will wait and see if Hoist contact me in due course. I doubt a debt collection company would simply write off something like this.

molerat

Halifax and BOS are effectively the same bank and do cross manage some products.  The important question - is there enough in the estate to cover or make a dent in the debt ?

beavere38

At the moment I believe there will be enough in the estate to cover it. I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

Keep_pedalling

beavere38 said:

At the moment I believe there will be enough in the estate to cover it. I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

Insurance policies written in trust and some pension payments do not form part of the estate so creditors cannot claim from them.

There is a pecking order ofwho gets what from estate assets

1 Secured debt creditors
2 Funeral Costs
3.Unsecured debt creditors
4. Beneficiaries 

lisyloo

beavere38 said:

At the moment I believe there will be enough in the estate to cover it. I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

Sounds about right if the insurance and pension were "in trust", then the money is outside of the estate.

Yes debtors get priority over beneficiaries from the estate, but it sounds like the insurance and pension are probably not part of the estate.

beavere38

Thanks for all the info, some useful stuff there I did not know about.

Shelldean

Keep_pedalling said:

beavere38 said:

At the moment I believe there will be enough in the estate to cover it. I found out there is a life assurance policy with a named benefactor and I am told this goes to the benefactor not into the pot. There is also a pension with a named benefactor and again this does not go into the pot. Is this right? I thought debtors were the priority to get paid before anybody else gets anything?

Insurance policies written in trust and some pension payments do not form part of the estate so creditors cannot claim from them.

There is a pecking order ofwho gets what from estate assets

1 Secured debt creditors
2 Funeral Costs
3.Unsecured debt creditors
4. Beneficiaries 

I thought the funeral debt took first priority???