debts after death - advice needed

ChillyP

Hi Everyone,

I am supporting my Aunt following my uncles death last week. Very sad time for us. He was in his seventies but it was more sudden than we had expected. 

Aunt and uncle were joint tenants in their house. Mortgage was paid many years ago. I understand that my Aunt became the sole owner of the house at the point of my uncles death and that the house does not form part of his estate. 

There is a joint account with about 2k in it. We have spoken to the bank, who have explained that the money in the account will become my aunts, and not 50%. We hadn't realised this. So this will also not for part of his estate. 

Uncle left a small policy to contribute towards funeral costs ( about 4K). 

All other savings is held in aunts name, so nothing to do with uncle. 

We have discovered that uncle had 4 debts, each one to a different lender - 

Debt 1 - £2700 - credit card
Debt 2  - £2000 - credit card
Debt 3 - £520 - credit card
Debt 4 - £5200 - personal loan ( this is solely in uncles name)

There will not be sufficient funds left in his estate to pay these debts. I understand that the 4k that has been left for funeral costs can not be claimed until reasonable funeral costs have been settled. It appears that all of the 4k will be needed just to pay for a 'standard' funeral. 

We are going to contact each creditor this week and explain that uncle has passed away, and that there is no money in his estate to settle the debts. I  have learnt that some lenders will write off the debts. 

I am also aware that any of these creditors could apply for an insolvency administration order within 5 years. From what I have read online, this is not a common route for creditors to take. 

Is anyone able to comment of the likelihood of any of the 4 creditors taking this action for the 4 debts listed above. Would it be worth the creditors pursuing the insolvency order for what I expect are relatively small debts?

I am quite keen for my Aunt to not be hounded.

Keep_pedalling

Highly unlikely they would for those sums. You should write to them informing them of his death, stating that his estate is insolvent and that no one is administering the estate and that should be the end of it. Include a copy of his death certificate with each letter. 

No one will have any visibility of his assets (or lack of them) as you will not be applying for probate.

ChillyP

Keep_pedalling said:

Highly unlikely they would for those sums. You should write to them informing them of his death, stating that his estate is insolvent and that no one is administering the estate and that should be the end of it. Include a copy of his death certificate with each letter. 

Thank you. I also think that this will be the case as individually, these are quite small debts. I suspect that the cost of an insolvency administration order would be a lot more than the value of the debts. 

Brie

I've seen higher amounts than these written off in similar circumstances.  I don't think there'll be any issue.  

fyi - the death certificate you send should be a certified copy but if you ring each to inform them they will tell you precisely what they require.  It should be that if a certified copy is required and you have a branch nearby you should be able to go into the branch and they will take a copy and certify it for their own use (but not for anyone else's).  

You say that one of the card's is solely in Uncle's name (so no fuss).  I assume the rest are actually his account but that Aunt has an associate card to use on that account.  This is still not a problem but you should tell her not to use any of these cards again and perhaps help her apply for another in her own name.  She's likely to need one at some point if she doesn't have one already.  It's possible that the banks Uncle had a card with will be willing to open an account for her quickly and easily in that she already has a relationship with them albeit at arm's length.

Don't forget to cancel any private pensions as well - assuming he had any.  But check if there's a widow's portion to come to Aunt at the same time.  Pension overpayments are a big hassle as they need to be repaid and sometimes people don't realise it and spend the money too quickly.  

Sorry for your loss.  It's a lot of work at a time when you might not feel like it but you're sure to get through it in time.

ChillyP

Brie said:

I've seen higher amounts than these written off in similar circumstances.  I don't think there'll be any issue.  

fyi - the death certificate you send should be a certified copy but if you ring each to inform them they will tell you precisely what they require.  It should be that if a certified copy is required and you have a branch nearby you should be able to go into the branch and they will take a copy and certify it for their own use (but not for anyone else's).  

You say that one of the card's is solely in Uncle's name (so no fuss).  I assume the rest are actually his account but that Aunt has an associate card to use on that account.  This is still not a problem but you should tell her not to use any of these cards again and perhaps help her apply for another in her own name.  She's likely to need one at some point if she doesn't have one already.  It's possible that the banks Uncle had a card with will be willing to open an account for her quickly and easily in that she already has a relationship with them albeit at arm's length.

Don't forget to cancel any private pensions as well - assuming he had any.  But check if there's a widow's portion to come to Aunt at the same time.  Pension overpayments are a big hassle as they need to be repaid and sometimes people don't realise it and spend the money too quickly.  

Sorry for your loss.  It's a lot of work at a time when you might not feel like it but you're sure to get through it in time.

Hi,

All of the cards were also solely in uncles name. My Aunt wasn't an authorised user. Thank you for the advice - much appreciated. 

sourcrates

Usually if you write and inform them of his death, and indicate that there are insufficient funds remaining from his assets to satisfy these debts, they will simply write them off without much ado.

The insolvency route cannot apply as title passes automatically to the surviving spouse, and becomes her sole property, no one else can be made responsible for his debts.

Rob5342

Brie said:

fyi - the death certificate you send should be a certified copy but if you ring each to inform them they will tell you precisely what they require.  It should be that if a certified copy is required and you have a branch nearby you should be able to go into the branch and they will take a copy and certify it for their own use (but not for anyone else's). 

They often have an online form where you can upload a scan instead of having all the hassle of messing around visiting a branch. 

There's unlikely to be anything left out of the £4000 after paying for the funeral, even a fairly minimal one with a couple of cars and a basic coffin can be £5000+

kimwp

sourcrates said:

Usually if you write and inform them of his death, and indicate that there are insufficient funds remaining from his assets to satisfy these debts, they will simply write them off without much ado.

The insolvency route cannot apply as title passes automatically to the surviving spouse, and becomes her sole property, no one else can be made responsible for his debts.

According to various legal websites, it looks like money could in theory be claimed off her. This link explains it very clearly.

https://www.lucasross.co.uk/creditor-services/deceased-insolvent-administration-order/

But in reality, they are likely just to write the debts off, particularly as they are small. (Can you imagine the potential bad press of a big corporation taking a grieving widow to court for £2000?!). 

I suggest as sourcrates does, writing to them and if there are any that aren't written off, perhaps a small fund could be created just in case, but it's unlikely to be worth worrying about.

ChillyP

(Removed by Forum Team)

Hi, 

Thank you for taking the time to post. Whilst I am sure it was unintentional, there are aspects of your post that I find insensitive/offensive. Perhaps I am feeling oversensitive as I am grieving. 

The £1195 that you refer to is for an 'unattended cremation'. Whilst this may be what some people want, it isn't what mu uncle will be having. The 'rules' regarding managing the estate clearly states that money for 'reasonable' funeral expenses comes before debts/liabilities. My uncle will be having a normal funeral. Nothing fancy, flash or top of the range. 

You said - "Your aunt is very fortunate if all the debts are in her husbands name, getting a credit card when you are over 70 is not always easy, unless there is an adequate income. The banks may ask questions about that income., especially for a £5200 debt"

First of all, I haven't mentioned whether there are any other debts in my aunts name, as this is irrelevant. My Aunt isn't 'fortunate' that the debts are in his name. There is actually no such thing as a joint credit card, so with the exception of the loan, my uncles debts HAD to be only his name. . The £5200 refers to a personal loan. This was applied for with a mainstream bank, who would have carried out affordability checks. There is absolutely no reason for this to be questioned. I do hope that you aren't suggesting that my uncle falsified his income on the application? I didn't mention anything about my uncles income as again, this irrelevant. For all you know, he could have been working full time earning a massive salary. 

As I said, you may not have meant to cause offence, however I think that you post is insensitive. 

pearl123

ChillyP said:

It appears that all of the 4k will be needed just to pay for a 'standard' funeral. 

You could consider a direct to crematorium no frills funeral, which would pull the price down. Plus, you could try https://www.funeralguide.co.uk/ to get an idea of local prices. 
I'm sorry for your loss. 

fatbelly

Op- there is no requirement for you to economise on your uncle's funeral. I think you know that.

I have read your posts and you seem to have an excellent understanding of the issues.


On the question you posted I agree with the others. There is a legal instrument that the creditors could use but for these sorts of debts it does not get used