Credit Card debt after death

Andysaint

Hi.

My mum recently passed away and we have discovered she had some unsecured CC debt that have long since been sold on to debt collection companies.

There is not enough liquid assets in her estate to clear these debts. Can I negotiate a settlement figure with them, or would they write off the debt if I send them the death certificate?

Would they ask for probate/confirmation with the death certificate?

Any help much appreciated

Andysaint

Forgot to mention I'm based in Scotland so Scots law

MorningcoffeeIV

If there's insufficient assets in the estate, they'll just have to accept whatever is remaining, whether that be part or no payment.

Make sure any debts are paid in priority order.

msallen

MorningcoffeeIV said:

If there's insufficient assets in the estate, they'll just have to accept whatever is remaining, whether that be part or no payment.

Make sure any debts are paid in priority order.

That's correct, but the OP mentions liquid assets, so if there are sufficient other assets (such as property) then they'll still demand payment.

400ixl

Sorry for your loss, but multiple threads with only half the information of other ones doesn't really help people give you an answer that can be relied upon.

https://forums.moneysavingexpert.com/discussion/6398123/survivorship-and-debts-of-deceased-scots-law

Yes there is property involved.

sourcrates

In a nutshell, liability for debt does not pass from person to person, it remains with the debtor, and dies with the debtor.

If there are sufficient funds to clear the debt from her estate, then that is what you can choose to do, you can also negotiate a settlement deal if you wish.

If there are not sufficient funds to clear the debts, then the debts will remain unpaid, and the companies will just have to take the hit, as they can no longer be enforced.

However, before you do either of the above, you should check to see if any of her debts are prescribed.

The 1973 Prescription and Limitation act (Scotland) states that debts will generally prescribe 5 years after becoming due for payment, that usually means either the date of default or the date of the last payment or written acknowledgement.

If she had been paying them, then the above may not apply, but best to find out first, as Scottish law dictates debts are extinguished and can no longer be chased under the above act.

IanManc

sourcrates said:

In a nutshell, liability for debt does not pass from person to person, it remains with the debtor, and dies with the debtor.

If there are sufficient funds to clear the debt from her estate, then that is what you can choose to do, you can also negotiate a settlement deal if you wish.

If there are not sufficient funds to clear the debts, then the debts will remain unpaid, and the companies will just have to take the hit, as they can no longer be enforced.

However, before you do either of the above, you should check to see if any of her debts are prescribed.

The 1973 Prescription and Limitation act (Scotland) states that debts will generally prescribe 5 years after becoming due for payment, that usually means either the date of default or the date of the last payment or written acknowledgement.

If she had been paying them, then the above may not apply, but best to find out first, as Scottish law dictates debts are extinguished and can no longer be chased under the above act.

The first two paragraphs are a bit misleading.

Debt does not "die with the debtor". Debts remain liabilities of the estate. Nor can you just "choose" to settle debts from the estate. In Scotland a personal representative is obliged to settle all liabilities in priority and can then distribute the estate to beneficiaries.

Of course personal representatives can try to negotiate down a debt, but if they cannot do so then they still have the liability to pay the debts once the funeral expenses have been covered.

If all the debts cannot be covered then the estate is insolvent, and the order of priority is: secured creditors; the interim and permanent trustee if the deceased is bankrupt; "privileged debts" such as funeral expenses and administration of estate expenses; "preferred debts" such as outstanding pension scheme contributions of money owed to the deceased's former employer; and finally "ordinary debts" which covers everything else owed by the estate.

Hope this helps @Andysaint.