Dad died with PCP, can they do this?

GolfR

Hi all, my dad died a fortnight ago and he had a brand new car on PCP; the finance was through Santander consumer and it was just in his name. The settlement figure is £24,500 or so and my dad had paid 13 payments of around £364 out of a total of 48 due payments. My mother cannot afford to keep the car (she wasn’t happy he got it in the first place!) and I already have a car so it has to go back. We were under the impression from Santander that the third option of giving the car back, them selling it at auction and the estate paying the difference was just that. However my mother has today had an email from them saying this:

If the agreement has not yet paid up to the Termination amount quoted on the agreement, The Estate is still able to Voluntary Terminate however, the Estate will be liable for the difference between the amount the Late (my dad) have paid and half the total amount payable.

Current VT liability:  £9000.66.

Is this what happens when they take the car back to sell at auction or are they using some loophole make us go down the route as if my dad was still alive and surrendering the car back to them to end the agreement?

My dad has very little estate as the main account was a joint one with my mother. I spoke to a solicitor through my works union last week on one of those free 30 minute advice things and he said they might try to open an insolvency administration order against the estate to make my mother sell the house so that they can use his half to pay off the debt.

I’m the one sorting all the funeral arrangements and my dad’s financial affairs etc. My mother cannot afford to pay this 9k, she can’t even buy herself a car at the moment and I’m having to take her to her chemo and appointments. I live an hour away and will be going back to work after the funeral so I’ve got no idea how things are going to work after it. 

Please help and give me any options that I have possible! Speaking to a solicitor would be great but that’s another thing we cannot afford.

Keep_pedalling

What they are doing is correct, but if your father’s estate is insolvent then the shortfall is treated like any other unsecured loan.

if there is simply nothing left after funeral costs then the action you need to take is simple, write the his creditor telling them that the estate is insolvent and that no one is administering it. Also ask then to take the car away ASAP. 

poppystar

Does what the advice OP received depend on how the house was held? If joint tenants then it’s outside the estate but if tenants in common they could force the sale as OP was advised? 

DE_612183

Have they taken the car back yet?

It may be worthwhile seeing what you can sell it for - perhaps the dealer you bought it from may take it back minus a grand or two?

Flugelhorn

poppystar said:

Does what the advice OP received depend on how the house was held? If joint tenants then it’s outside the estate but if tenants in common they could force the sale as OP was advised? 

this is definitely something that needs checking - if TIC then the estate is probably quite significant size

doodling

Hi,

GolfR said:

[...]

My dad has very little estate as the main account was a joint one with my mother. I spoke to a solicitor through my works union last week on one of those free 30 minute advice things and he said they might try to open an insolvency administration order against the estate to make my mother sell the house so that they can use his half to pay off the debt.

[...]

If your parents jointly owned their house then what the solicitor said is theoretically correct.  £9k is a little on the low side but is starting to be enough money that someone might consider the legal costs of doing that worth it.

How was the house owned?  As Joint Tenants or Tenants in Common?

In the Joint Tenants case, as others have said, if everything else was jointly owned then the estate is insolvent and you should write to the finance company telling them that.  Whilst you can arrange a funeral using your dad's assets (if there were any), you shouldn't try and deal with any other of his financial affairs (it doesn't sound like there are any to deal with so that is easy).  Assuming that you haven't involved yourself in his financial affairs beyond the funeral then you can also tell the finance company that no-one is administering his estate (otherwise they will continue to hassle you for money).  It is open for the finance company to apply for an insolvency administration order to go after what was his share of the house - whether they will do that for £9k is anyone's guess.

In the Tenants in Common case, the estate is not insolvent (his estate includes half the house) and the money will need to be found.  You can try telling the finance company that there is no cash in the estate to pay them but I suspect that will simply prompt them to wonder if there are other non-cash assets.  If you don't deal with the finance company then you won't be able to transfer the ownership of his half of the house to whoever it is due to go to by will or intestacy.

As others have said, it is worth checking that £9k is a fair value for the finance company's loss.  Is there really that much difference between the value of the car and the outstanding loan balance?  Note that £364 x 35 = £12740 so the finance company are saying that the car is worth £3740 more now than it would be in 3 years time - does that feel right?

Keep_pedalling

No way will a creditor go to those lengths for £9k, the legal costs would be well over that level. They also will not have any visibility of the estate assets because probate will not be required. 

Green_hopeful

Might be worth checking what the car is worth. New cars have long waits so someone might pay a premium for a nearly new one. 

GolfR

I wanted to answer and ask questions relating to your replies, I’m no good with quotes when there’s multiple people! Thank you very much for the advice given so far.

The car is still on my parents drive. From looking at auto trader the car is worth approx 23k to sell from a dealership so maybe she could sell it for around 20/21k to them if she goes down that route and then the difference would be a lot smaller and very unlikely they’d chase that, given that the settlement figure is around £24,500 - I do have the exact figures. This is something that was given as an option. I understand no probate is required as the estate is of very little value, my mother is officially administrating it due to her being the NOK but I’m dealing with the nitty gritty of it as she has enough to deal with at the moment without this. I was dealing with them via email after the initial ‘letting them know’ which was over the telephone. They asked that the administrator of the estate email them to say that we wanted to go down the ‘giving the car back’ route.

How will I find out if they’re joint tenants or or tenants in common? Will it be on the deeds or land registry? They bought the house as a married couple in 1980 ish so I’m assuming they’re joint tenants but I will try to find out, the mortgage was paid off long ago.

My parents house is probably worth around 150k, we don’t live in an overly expensive area. To give figures, my dad has £720 in his sole current account (it was barely used), he has £950 or so owing on a credit card and a finance thing with currys through creation for a laptop which has around £300 left. No other debts. My mother is using the money from the joint account to pay for the funeral, there won’t be a huge amount left after this. Aside from informing the companies, we’ve not done anything else and we’ve cancelled the direct debits to do with these debts as advised by Barclays where the joint account is held and where all DD’s were coming out of.

Thanks again for your advice.

elsien

https://www.gov.uk/government/organisations/land-registry

£3 fee, I think. 

Flugelhorn

elsien said:

https://www.gov.uk/government/organisations/land-registry

£3 fee, I think. 

elsien said:

https://www.gov.uk/government/organisations/land-registry

£3 fee, I think. 

this will give you a copy of the land registry entry - it won't say "joint" or "tenants in common " but if it has the words 

"

Form A (Restriction on dispositions by sole proprietor)

No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court. " 

then that implies it is tenants in common 

Just thinking - others will know, if they bought it in 1980, will it be on the digital land registry database?