Deceased Husbands Debts.

WidowHelp

Hello, I posted this question on another board and have been advised to post again here and maybe seek advise from "Sourcrates".

I am the sole beneficiary to my husbands estate and the executor. He has left 2 debts totaling to maybe £10000. I have been granted probate and the estate is only made up of the house we are living in.... Me and our two children 10 & 13 years.  Our home is owned outright.

I have spoken to the company Phillips and Cohen who had taken over the debts and offered to set up a payment plan but was quickly shot down with "we don't accept installments" and told to get advice from citizens advice. I cant get an appointment at CA (been trying for 2 weeks).

I want to be proactive with sorting this debt but I am really panicking they will force the sale of our home.

A little background information....  Asked by the other forum....

He had less than £500 in his bank (which they kept to pay off an overdraft), a car worth £200 maybe. We were with Step change paying off our debts and doing really well.... I am still with them paying my debts - I offered to keep his debts, I'm not trying to get out of paying them but they said I couldn't

We were married for 16 years. The house was his before we met, always in his name. 

It was our plan to leave it as inheritance for the children as it is the only thing of value we own. He changed his will to me being the only beneficiary when we knew the children would still be minors when he died. But I will honor our first plan and keep our house as their inheritance. 

Once diagnosed, we expected to have maybe three years, he died with 5 weeks, So no, there was no time to change to joint tenancy on the house.

Any advice on what I should do would be really appreciated. Thank you

RAS

Thanks @sourcrates @fatbelly

Brie

So sorry for your loss and the situation you are in.

I quite agree that @sourcrates is the resident expert around here.

My take (he'll correct me if I'm wrong) is that if the house was left to you your husband's creditors have no right to it as it's now your asset and not in the residual estate.  And even if it was no one is going to force the sale of a property for the sake of £10k.  

I think what you need to do is write to the creditors that your husband died with insufficient assets even for funeral costs and therefore there's no money available to pay any debts.  Letters like this sometimes have more weight if they come from someone official - like someone at citizen's advice or a community money adviser of some sort.  Many organisations have set format letters that use the language that creditors understand.  

Even if they don't agree with writing everything off they will understand they need to give you some time to sort things out.  So don't panic.  And should someone try to play the heavy with you, particularly if they show up at your house, don't let them in and simply say "send me a letter" and close the door.

Hoping the future becomes brighter for you and you and your children can find a way through this all.

Keep_pedalling

Brie said:

So sorry for your loss and the situation you are in.

I quite agree that @sourcrates is the resident expert around here.

My take (he'll correct me if I'm wrong) is that if the house was left to you your husband's creditors have no right to it as it's now your asset and not in the residual estate.  And even if it was no one is going to force the sale of a property for the sake of £10k.  

I think what you need to do is write to the creditors that your husband died with insufficient assets even for funeral costs and therefore there's no money available to pay any debts.  Letters like this sometimes have more weight if they come from someone official - like someone at citizen's advice or a community money adviser of some sort.  Many organisations have set format letters that use the language that creditors understand.  

That is incorrect. The order that has a call on an estate is 1. Secured dept, 2. Funeral costs, 3. Unsecured debt and lastly the beneficiaries.

In this case the OPs husband’s estate is not insolvent and there are sufficient assets to pay the unsecured debt, it’s just that the only real asset is an illiquid one and is also the OPs home.

The OP has also obtained probate so the value of the estate is in the public domain so it would be a big mistake to write a letter claiming insolvency. 

RAS

Had the husband been able to arrange that the house was held as a joint tenancy, rather than tenants in common, the estate would have been insolvent. As it was still in his sole name, the estate is solvent.

Brie

Thanks RAS & keep_pedalling - I stand corrected on the estate!!!

I do stand by the idea of writing to creditors and saying that there's no money currently to pay debts.  That's true from what the OP has stated.  Also I've yet to see a creditor force a house sale for what is a relatively small amount.  Particularly if it's going to get them the publicity of "widow and children being forced from family home".  Some will look at the situation and simply write debts off if it's going to cost them too much time and effort to try to collect it.  Some will consider that the debt has died with the debtor.  

sourcrates

First of all, very sorry for your loss, and the issues you are currently facing.

With regard to the debts, assuming they are unsecured and fall under the consumer credit act, Phillips and Cohen should not pose too much of a problem.

The estates liquid assets were not sufficient to service all your late husbands debts, so as long as you and the children are living in the property, I can`t see what they can do to be honest.

In theory they may have a route to obtain a charging order, in practice nothing would come of that, as that is your family home.

A court would never grant an order for sale with children living in the property, it would first look at all the alternatives, in this case an instalment plan might be acceptable to the court, or they may suggest something else.

Please get it out of your mind that you may lose your home, that is very, very unlikely to happen, orders for sale are so rare, they no longer keep official records, and that would never be granted under these circumstances anyway.

If they won`t accept a payment arrangement, then that is their problem.

It`s very unlikely they will take further action over this, they will be aware of how widows and children are viewed by a court in these circumstances, I would in future only converse with them in writing, and avoid speaking to them on the phone again.

fatbelly

I was waiting for Sourcrates because it's easier to just say 'I agree' rather than write all that.

I'll make a couple of extra comments. 

One is that there is a difference between what they could do and what they will do.

The second point is that they are writing to you not as a grieving relative, or a beneficiary but as executor.

I think it may be best to write that you are still collecting information about the deceased's estate, and that could take 6-12 months.

In the meantime get the property into your name.

WidowHelp

Thank you for all your help. Feeling a bit calmer now. Was worried about not talking to them on the phone but I will get a letter off to them ASAP and work out how to put the house into my name.  Thank you again.

EssexHebridean

Phillips and Cohen do a LOT of probate related work, and they are absolutely used to needing to wait to have their money until an estate is settled. When you write, confirm to them that going forwards all correspondence must be in writing, that will stop them trying to badger you by phone. 

I also wanted to say how very sorry I was to read of your situation - you and your children must be utterly heartbroken, and the very last thing you need is added stress from debt vultures. 

datlex

Tell them to do a running jump and to stop harassing you.  Can You Inherit Debt? 2023 Laws (moneynerd.co.uk)