Philips and Cohen chasing parents debt.

dddkkk07

Hi all, 

I know there are many posts and P&C but non seem to exactly match my situation so am looking for some advice. 

We lost my father this year and he had 6k of debt from a bank loan which was picked up by P&C, I am the executor of the estate.  In terms of the estate there wasn't really anything left there was a life insurance policy but most of that was used up for funeral costs. However my parents house they were tennents in common so technically half of the house falls under his estate. P&C are aware of this as we filled in the inventory form, they have left us alone for 8 weeks while we decide how we will proceed. My mum doesn't have that kind of money so paying it off isn't an option. 

To make things a little more complicated my mum is a full time carer for my grandma and we have had to have the downstairs of the home modified to accommodate her so can't risk them coming after the hosue to settle the debt. 

I'm a novice in this area so any advice will be appreciated on how to proceed. 

RAS

Basics.

When was the loan taken out? Had it been paid up to date when he died? Or was a very old loan that had been defaulted?

And was it a secured loan or consumer credit?

dddkkk07

Thanks for the response
The loan was a consumer credit loan, about 2 years old and was paid up to date until his death. 

Malthusian

As the estate is solvent the loan will need to be settled before distributing the remaining assets.

Would P&C agree to moving the debt to your mother's name and arranging a repayment plan? After repaying as much as possible with what is left of the life insurance money?

Could you and/or her other heirs pay the debt on her behalf as an investment in your future inheritances while helping your mum out?

As a last resort she could use equity release to borrow money against the house, but that would be an expensive option, maybe disproportionately so for a relatively small loan.

Keep_pedalling

Who did your father leave his portion of the house too? If if was to his children then would it be possible for them to clear the debt?

Looking forward it seems your mother is in the unfortunate position of being asset rich but cash poor so I would be a bit concerned how she will manage when any large expenditure is required on the house, such as a new boiler. At some point downsizing or ER may be required.