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Scottish Insolvency for a deceased person ...



  • buddy9
    buddy9 Posts: 510 Forumite
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    Presumably the solicitor has submitted a debtor application for sequestration to the Accountant in Bankruptcy on behalf of the executor and therefore there is now an entry in the AIB’s insolvency register.

    Having a special destination (survivorship) in the title of a house in Scotland, as is the case here, does not exclude the deceased’s share being available to creditors. If you follow the link provided by Sourcrates this is explained.

  • theoretica
    theoretica Posts: 12,431 Forumite
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    I`m not too hot on Scottish law, but if the debts were solely your mums, and her assets don`t cover everything that is owed, then that`s just tough luck on the creditors, dad can`t be held liable for another persons debts.

    What happens to your Debts When you Die? – Advice Scotland

    This is from the above website -

    "However, if you have no money left when you die, or what you have is only enough to pay off your funeral and death bed expenses; or if there is money left, but not enough to pay your debts in full, then your estate is effectively insolvent, which means there is not enough money to pay your debts.

    In such a situation money should not be given to any of the people that are named as beneficiaries in your will until all your debts are paid.

    If there is no money left to pay your debts, your lenders will normally write them off if they are notified of your death, otherwise they are usually written off by law because they become statute barred".

    Basically if dad can`t pay what they are asking, the creditors cannot force him, as the debts are not his, so they would eventually go statute barred, or "prescribed" in Scotland, after a period of 5 years.

    Must be using a crap solicitor if they have not explained all this to him.

    You need to read further down the same website:

    Survivorship Clauses (Special Destinations)

    A Survivorship or Special Destination Clause in the title deeds to a home will normally state the property is owned by “Owner A and Owner B and the Survivor”.

    What this means is the property is owned jointly by both and on the death of one of them, the other, “the Survivor” becomes the sole owner.

    When a property has such a clause in the title deeds, the property on the death of one of the owners, automatically becomes the outright property of the other owner. No conveyancing is required, and the property never is dealt with by the Executor of the estate.

    However, Scotland’s Supreme Court, the Court of Session, has held in such cases (Fleming’s Trustee v Fleming) the surviving owner, when they take the other owners share of the property also take their liability for their debts up to the value of the property that was transferred to them by the Survivorship Clause.

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