Paying debts from an estate that doesn’t have enough to cover all debts plus car lease debt options

ss2020jd

I have heard back from the dealership and they say they will buy the car back for £14,000 meaning a negative equity to be repaid of £6000. But they say it could take time as they need to obtain a new settlement letter. I am not sure if I can negotiate on this as the value of the car I believe should be around 15,000 and that valuation is with higher mileage. 

As I mentioned, the company collecting on behalf of lease finance Co said I could only deal with the dealership if they were going to give me more than the value of the car. I’m not sure how to find out if this is correct. 

In case that it is, does anyone have any experience or advice on how to present an offer to settle the debt on the proportional amounts due? I have seen template letters but these only deal with writing off the full debt.

Ganga

Have you tried to sell the car to some one else? you might get a better offer from WBAC or Motorway ,this will reduce the debt to the lease/finance company.

molerat

IMO you cannot sell the car if you cannot clear the full settlement figure as it is not yours (the estate) to sell and getting what could be considered less than the actual value of the car could put you personally in an awkward legal situation. Your only option is to return the car, give them back their property, and settle any outstanding amount pro rata.  If you only have £6K to settle all debts it is of no real concern to you how much goes to each creditor as long as it is fairly distributed according to the value of the debts.

boingy

ss2020jd said:

I have heard back from the dealership and they say they will buy the car back for £14,000 meaning a negative equity to be repaid of £6000. But they say it could take time as they need to obtain a new settlement letter. I am not sure if I can negotiate on this as the value of the car I believe should be around 15,000 and that valuation is with higher mileage. 

As I mentioned, the company collecting on behalf of lease finance Co said I could only deal with the dealership if they were going to give me more than the value of the car. I’m not sure how to find out if this is correct. 

In case that it is, does anyone have any experience or advice on how to present an offer to settle the debt on the proportional amounts due? I have seen template letters but these only deal with writing off the full debt.

I think you are getting a bit bogged down with the car thing. Just hand it back to the lease company and ask them for the final bill. Then pay them and the other the creditors the same proportion of their final bills based on how much is left in the estate and let them know that there is no more money in the estate. 

MeteredOut

boingy said:

ss2020jd said:

I have heard back from the dealership and they say they will buy the car back for £14,000 meaning a negative equity to be repaid of £6000. But they say it could take time as they need to obtain a new settlement letter. I am not sure if I can negotiate on this as the value of the car I believe should be around 15,000 and that valuation is with higher mileage. 

As I mentioned, the company collecting on behalf of lease finance Co said I could only deal with the dealership if they were going to give me more than the value of the car. I’m not sure how to find out if this is correct. 

In case that it is, does anyone have any experience or advice on how to present an offer to settle the debt on the proportional amounts due? I have seen template letters but these only deal with writing off the full debt.

I think you are getting a bit bogged down with the car thing. Just hand it back to the lease company and ask them for the final bill. Then pay them and the other the creditors the same proportion of their final bills based on how much is left in the estate and let them know that there is no more money in the estate. 

This. Since all the £10K is going to be wiped out by the debts, frankly, you shouldn't care, just get all creditors to give you the final outstanding amount, inform them the estate only has that £10K, and apportion it pro-rata accordingly.

ss2020jd

Thanks everyone, that’s very true. I am probably making it more complicated than it needs to be. it is definitely bogging me down. I’m trying to make sure I do it all correctly. 

maman

Just out of curiosity and to help others who might experience similar, would the funeral expenses be paid in full? I know  they're a debt to the estate but presumably they take precedence over the other debt. 🤔

ss2020jd

maman said:

Just out of curiosity and to help others who might experience similar, would the funeral expenses be paid in full? I know  they're a debt to the estate but presumably they take precedence over the other debt. 🤔

Yes that is what I have been advised. They are paid in full first and take priority. 

MeteredOut

Not quite first. See here (England and Wales):

https://www.bereavementadvice.org/topics/probate-and-legal/insolvent-estates/

Secured creditors first, funeral expenses next, then onto others.

This was mentioned by Keep_pedalling upthread too.