How do you pay bills on closed accounts now that there are funds to pay?

4871sam

I’m writing on behalf of family members. 

They lost their dad recently and he had outstanding utility bills. At the time they thought there would not be funds in the estate to pay them as they knew they’d be having to pay back money they borrowed for his  funeral.   They explained this to the utility companies and accounts were closed and amounts written off.

History: the funeral was quick (religious reasons -next day). A family matriarch took on the responsibility of organising the funeral and paying the bill, this was considered a loan.  They planned to use money from the estate to pay her back once their dad’s bank account was closed/funds made available and everyone had had time to grieve. The amount in the bank account actually was not enough to even pay the loan back fully.  Recently the aunty told them they she didnt want them to worry about it and she didnt want to be paid back any money. 

So now they are in a situation where they have the funds to pay the utility bills.  A couple of months have passed accounts have been closed, so how do they go about paying the utility companies?

Q1. Is it possible to pay bills once accounts have been closed and amounts written off?

Q2. One utility company closed the account but passed on the balance details to a deceased account care specialist to manage. (At the time they were told this was normal way of doing things and that they just had to explain no funds to pay once they received the letter - but obviously circumstances have changed since).  So is this bill not written off yet? If this is the case it could be quite straight forward to pay it. They have been sent a letter to finalise the account.  If they pay via this specialist will the utility company get the money or is this actually a debt that has been bought and this firm will keep any payment? 

Thank you

Savvy_Sue

Are the family able to clear ALL the outstanding debts now? If not, there's a risk involved in paying some but not others.

4871sam

What is meant by risk please? 

RAS

If the estate is intestate, you refuse to intermeddle and the creditors have the option of administering the estate.

If you intermeddle (start paying any creditors), then you are administering the estate. You then become liable if any other debts become evident and there isn't enough money left to pay the newly found creditor. So you'd have to make sure there were no more debts lurking anywhere before you did anything.

Might be easier to reimburse auntie?

4871sam

Dont think they realised any of this just thought they were acting as next of kin sorting affairs. They've had to deal others things on his behalf like clearing his house,  paying back pension overpayment so maybe they are already classed as administrators? 
They arent expecting any other debts to arise only the ones that were written off if they can be reactivated??  But maybe there are other things they hadnt considered - thats worrying for them.

How do creditors administer an estate if the bank account is already closed and funds been given to next of kin? 
Do they look into peoples accounts?  If the creditors can administer an estate anyway wouldn't they eventually have to pay them?

So if they were to persuade aunty.  How do they respond to the letter from the from the deceased specialist account mange company? 
If they cant persuade aunty what should they do?   Continue to try and pay bills and hope all closed accounts can be re opened to be paid or just pay the one thats with the deceased specialist?   

Do deceased specialist will look for other debts or apply for administration even if a bill is paid ? 

TBagpuss

Creditors *can* apply to administer an estate but are only likely to do so if there's something n it for them. For instance, if the person who died owned a property  or other assets, just not enough to pay all their debts in full - if for instance, a creditor is owed £20,000 then it may be worth them applying to administer the estate even if they will only get £10,000 of that back - if they are owned £5000 then it is unlikely to be worth their while. 

The risk mentioned is that where an estate is insolvent (i.e. the debts are more than that assets) there are very strict rules about which order debts are paid in, and what proportion of each debt is paid. If you don't comply with the rules then you can be personally liable for paying the creditors what they would have received if you had followed the rules. Obviously the risk is bigger where the debts are substantial - if you are confident that there are no other debts then it's unlikely to be a problem.

However, since the funeral costs take priority, it's probably much simpler and less risky to repay Auntie and leave the other debts as written off. 

 

xylophone

A family matriarch took on the responsibility of organising the funeral and paying the bill, this was considered a loan.  They planned to use money from the estate to pay her back once their dad’s bank account was closed/funds made available and everyone had had time to grieve. The amount in the bank account actually was not enough to even pay the loan back fully. 

https://www.funeralservicesguide.com/insolvent-estates

 It seems to me that Auntie is owed the money for the funeral which is a priority debt as there are no secured creditors.

She should be repaid.

What she chooses to do with her own money after that is up to her.

There is then no money in the state to meet  any other debts.

sheramber

By closing the bank account and passing the money to somebody have they not already inter  meddled?