what happens to defunct Debts when you die

I have a family member who is terminally ill with Cancer, they had a tough life and went through a lot of debt issues and are on benefits.

All of their debts are past the Limitations Act, some were CCJ's also well past six years.

My question is whether these creditors have any rights to their estate when they die?

It will be paltry, but they want to pay the little they have towards their funeral, they want to pay into a scheme but I am not sure they would accept a terminal patient and there was a big fuss with these companies going bust.

They have no partner so as I read it they will not be eligible for a funeral payment, they have a disabled child who is now adult.

https://www.gov.uk/funeral-payments/eligibility

So who picks up the bill for their funeral I don't know?

Someone told me that the creditors can come after the estates of the dead, it that true?







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  • Brie
    Brie Posts: 9,364
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    My understanding is that if your relative had no money whatsoever then the local council would be responsible for providing a Public Health Funeral.  But if they do have some money it is normally accepted that the first call on those would be to pay for the funeral.  Costs vary depending all the extras one might get with it but it's possible to essentially do something very no frills, no one attending, probably at a random unfill spot at an awkward time at the crematorium.   

    This from Debt Camel might help....

    Help with funeral costs (debtcamel.co.uk)

    This is the crucial bit I think....

    The law says that paying her funeral expenses is top priority. If she had any debts, her creditors will just have to wait and see if there is anything left over after the funeral costs have been paid.

    Her bank will usually be prepared to pay the funeral director’s bill directly and not wait until probate has been obtained.

    "Never retract, never explain, never apologise; get things done and let them howl.”
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 4,130
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    This is a question that comes up on this section of the forum from time to time.

    Deaths, funerals & probate — MoneySavingExpert Forum
    If you go down to the woods today you better not go alone.
  • marcia_
    marcia_ Posts: 1,527
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    edited 13 January at 3:34PM
     Whoever is next if kin, their child, can claim a DWP Funeral payment if in receipt of certain benefits. It will cover the cost of a basic funeral. I got it for my sister which isn't listed on your link but was paid to me as i was responsible as partner and son were not prepared to pay. All i paid for when i recently arranged a funeral was the flowers. 
  • badmemory
    badmemory Posts: 7,527
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    The first priority for payment is the funeral.  If your relative owns any premium bonds I suggest they cash them now & I doubt anything else will require probate.  Also if they have any private pension not taken then suggest they check up on who is nominated as the recipient.  This is not included in their estate so not needed for any debt repayment.  I'm sure there are other things to think of too.  Hopefully someone will be along to fill in any gaps.
  • RAS
    RAS Posts: 32,477
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    edited 13 January at 5:35PM
    Dataless said:
    I have a family member who is terminally ill with Cancer, they had a tough life and went through a lot of debt issues and are on benefits.

    I suppose the first thing to say is that regardless of the rules, there will often be some bright spark making up the law in an attempt to get money from the estate of a deceased. If challenged, they were of course just asking nicely in case the relatives/friends felt like boosting the claimant's commission. Don't pay anything except the funeral costs without getting specific advice.

    All of their debts are past the Limitations Act, some were CCJ's also well past six years. 

    Unless the creditor took further legal action to enforce the CCJ with 6 years of it's issue, even those creditors can whistle.

    My question is whether these creditors have any rights to their estate when they die?

    Only for secured debt, in a few circumstances.

    It will be paltry, but they want to pay the little they have towards their funeral, they want to pay into a scheme but I am not sure they would accept a terminal patient and there was a big fuss with these companies going bust.

    Check out the price of a "direct cremation" locally. That's the minimum and if your relative has less than that, then a Public Health funeral will be funded by the hospital or social services.

    They have no partner so as I read it they will not be eligible for a funeral payment, they have a disabled child who is now adult.

    https://www.gov.uk/funeral-payments/eligibility

    It depends on which benefits the child receives.

    So who picks up the bill for their funeral I don't know?

    Depends on how much the deceased has, whether their child is eligible for a funeral grant etc. If it comes to a Public Health funeral, the provider supposed to treat the deceased with dignity, which may mean a simple service with a few attendees at a time that suits the crematorium.

    Someone told me that the creditors can come after the estates of the dead, it that true?

    Yes, if the estate has assets, generally only if those exceed the cost of the funeral. However, secured debt takes priority over funeral costs.

    Some information in your query.
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  • sourcrates
    sourcrates Posts: 28,558
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    Coincidently I am currently dealing with a similar matter, regarding a close relative.

    Funeral costs take priority, any money in their bank account can be put towards the funeral cost.

    You can get a "funeral expenses payment" from the DWP, if on a low income or on certain benefits, but this only pays out to a max of £1000.

    If there are insufficient funds within the deceased's estate, then the local council/Hospital will do a basic cremation ceremony billed to the tax payer.

    The estate is dealt with by the executor of the will, if there is one, its up to them to obtain probate, and then distribute the estate in order of preference, any secured debt first, tax liabilities etc etc, last comes any unsecured creditors, if the value of the estate is less than the debts owed, then they are simply out of luck and have no choice but to accept that.
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  • marcia_
    marcia_ Posts: 1,527
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    Coincidently I am currently dealing with a similar matter, regarding a close relative.

    Funeral costs take priority, any money in their bank account can be put towards the funeral cost.

    You can get a "funeral expenses payment" from the DWP, if on a low income or on certain benefits, but this only pays out to a max of £1000.

    If there are insufficient funds within the deceased's estate, then the local council/Hospital will do a basic cremation ceremony billed to the tax payer.

    The estate is dealt with by the executor of the will, if there is one, its up to them to obtain probate, and then distribute the estate in order of preference, any secured debt first, tax liabilities etc etc, last comes any unsecured creditors, if the value of the estate is less than the debts owed, then they are simply out of luck and have no choice but to accept that.
     I was given £1500 as it was itemised as the cheapest basic funeral available 
  • Dataless
    Dataless Posts: 41
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    Thanks to all for replies, that has been very helpful.

    So to sum up, only current debts can be claimed, not those statute barred or CCJ older than 6 years.

    Council will pay for funeral if nobody else does and if there is nothing in the estate.

    The adult offspring may be able to get help from DWP, they are on PIP I think, I don't think it qualifies, so Council will be the backup.
  • RAS
    RAS Posts: 32,477
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    Dataless said:
    Thanks to all for replies, that has been very helpful.

    So to sum up, only current debts can be claimed, not those statute barred or CCJ older than 6 years.

    Council will pay for funeral if nobody else does and if there is nothing in the estate.

    The adult offspring may be able to get help from DWP, they are on PIP I think, I don't think it qualifies, so Council will be the backup.
    Depending where the deceased dies, it is possible that the next of kin need to speak to Social Services in the hospital or Social Services in the LA where the deceased live. If they will know who to speak to if they don't actually do the organisation themselves, and possibly other local sources of funding.

    If the dying relative was ever in the forces, might well be worth checking the relevant charity, like SSAFA.
    The person who has not made a mistake, has made nothing
  • hoverFrog1
    hoverFrog1 Posts: 47
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    I was the executor of my mother's will. After funeral expenses there was not a lot left. Her creditors came after me for her debts months after I had cleared her accounts and paid everything I knew about. I just sent them a copy of the death certificate and told them to write the debts off. They did so.

    It sounds as if the priority is end of life care and funeral costs. After that is paid anything left should go to creditors but it doesn't sound like there will be anything left.
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