Does a debt die with you?

furndire

A friends mother died recently ~ she has some debts, but not enough to cover them. Catalogues etc. Are the family liable for them. Her husband is not on the scene - divorced several years ago, and she has been living with new partnerfor a few years.
CAB have told her she is liable to pay mothers debts ~ surely this can't be right.

furndire

Thats what I thought, but Citizens Advice have told her different.

southernscouser

My knowledge is limited so don't take it as set in stone but I'm sure Al is right.

If there isn't enough in the estate then they aren't liable for them. I'm not sure what the law is on charging orders on property though! :undecided

However, with things like catalogues you could always try the route of asking for signed credit agreements. If they can't provide one then the debt isn't enforcable. Again I don't know how this works with the deceased but it could be an avenue to explore.

furndire

she was in a rented property ~ so nothing there.

Willman_Rodders

If a person's estate is insufficient to repay their liabilities then the residual debt does 'die' with them. To come to this situation all their assets (including their house, personal belongings, car, cash, savings and investments, life policy proceeds etc) have to be less than their total liabilities. Debts and funeral bills must be paid before any residue is distributed to any beneficiary. If the debts exceed the net worth of the estate then no 'residue' or legacy distribution will occur.

If the deceased is insolvent then the executor/adminstrator is advised to seek legal advice before agreeing to act as the executor/administrator. There is a specific 'pecking order' of who should be paid out of the estate; the 'pecking order' (stipulated in Law) ranks certain creditors over others. This can result in some debts being repaid in full - to the exclusion of others. Or it can result in all debts of a particular 'rank' receiving a percentage share.

If the executor (or administrator if no will was made) distributes the residue not in accordance with the 'pecking order' they become personally liable to those creditors for the amount those creditors should have recieved but did not; and could be sued by the creditor for this amount. The executor/administrator do not have recourse to those creditors they paid too much to.

The executor/administrator may be wiser to let a creditor obtain probate for the deceased.

Care also needs to be exercised with the funeral arrangements. Who will pay for them?

HTH.

Rod

takoo

Hi Fundire

Pyramid leisure and pleasure - if the CAB is right

• we could all live the high life in the expectation that our debts would be paid by our children.
• If we 'worked' hard at the high life all our children would become bankrupt and would not be able to afford our funerals.
• the state would have to fund all our funerals and more and more tax would be needed........

Sorry, a couple of days ago my wife and I began a reading of Alice in Wonderland - together aloud. I am caught on the title Takoo's Pyramid of Leisure and Pleasure.

I am sure that the CAB is not right - as pointed out by other posters.

Good luck

Takoo

ceridwen

Voice of personal experience here - the CAB are not the be-all and end-all for giving advice. The advisers are human and will make mistakes - I've experienced wrong advice from them myself - and also experienced "breach of confidentiality" (thats another story - <kicks own backside for not putting in official complaint>).

margaretclare

Debts DO die with a person. The only caveat to this is, if the deceased leaves any kind of an estate then the debts are set against that estate, after funeral costs have been paid. But debts definitely do not pass to another person, whether spouse or other relative.

You occasionally see newspaper ads saying that someone has died, so-and-so solicitors are dealing with the estate, and inviting 'anyone who has an interest' in the deceased's estate to apply to the solicitors. So if someone died leaving debts but leaving an estate that solicitors were dealing with, it would be possible for the creditors to contact the solicitors, with proof of their claim, and get paid that way.

If a person dies leaving nowt, or just enough to pay for the funeral, then no one else inherits the debt.

HTH

Margaret

furndire

Thanks for all your replies. I was pretty sure CAB were wrong, but wanted to get more info before I told her what I thought. I am going to print this lot out, and give it to her.

alwaysonthego_2

http://www.communitylegaladvice.org.uk/en/legalhelp/leaflet10_13.jsp

btw I am an adviser at the CAB and I am sorry if you have been given the wrong information, you should put in a complaint and this person can be given more training. At my CAB we usually print out info for clients, which backs up what we are saying.

Newly_retired

I am training to be a CAB advisor and we discussed this very same issue today.
If there is no estate the debt does die with the deceased. If there is an estate then debts have to be paid first before any residue is distributed. However if anyone shared the debt jointly they may be liable. If any one acted as guarantor for the debt they may be liable.
We are only human but have access to lots of information. Sorry if you were misled - do complain.