Advice re late husband's credit card debt

cheap_charlie

My husband died last month and I have since discovered he owed around £24,000 on credit cards.

We jointly owned a house and had a joint bank account with joint savings. I need the joint savings to live on until I can sell the house and pay off our mortgage. There is equity of about £400K on the house.

Will I be liable to pay the debt? He only had one bank account held in his name that had money in it - which amounted to about £1,200. There is more in the joint savings account - would that be classified as part of his estate?

I am quite concerned about this - I do have a solicitor acting as executor to deal with this but one company sent me a letter last week asking for the Probate document (which seemed ridiculous to me given he only died 4 weeks ago) or payment of £12K!!! :eek:

Any advice would be accepted gratefully.

jonesMUFCforever

The debt forms part of his estate as does half (presumably) of the net value of the house and joint account savings.
I would suggest you get proper legal advice.

The worst thing that can happen if you say there is no funds to pay is to put a charging order on your house which might delay any forthcoming sale.

Don't say anything on the phone to anyone or fill in any forms from these credit card companies until you have seen a solicitor.

Scousebird_2

Yeah i'm with jonesMUFCforever on this one-see a solicitor before doing or saying anything-and I am so sorry to hear of your loss.xx

noh

The debt becomes part of the estate but jointly held assets do not except for IHT purposes. If all assets were held jointly there will not be any need to apply for probate.
Your solicitor will be best placed to advise you.

From http://www.saga.co.uk/money/retirement/your-guide-to-making-a-will-part-two.asp


"Estate: the total value of everything you own at death less any outstanding commitments. All the assets therefore which can be disposed of under the will or which pass under an intestacy. Jointly held assets that pass by survivorship automatically to the other joint owner and “nominated” assets do not form part of the “estate”."

Nigel

CLAPTON

noh wrote: »

The debt becomes part of the estate but jointly held assets do not except for IHT purposes. If all assets were held jointly there will not be any need to apply for probate.
Your solicitor will be best placed to advise you.

From http://www.saga.co.uk/money/retirement/your-guide-to-making-a-will-part-two.asp


"Estate: the total value of everything you own at death less any outstanding commitments. All the assets therefore which can be disposed of under the will or which pass under an intestacy. Jointly held assets that pass by survivorship automatically to the other joint owner and “nominated” assets do not form part of the “estate”."

Nigel

I would council caution here; you need to discuss this with your legal advisor... these assetts may well not count for IHT purposes but they are not exempt for debt purposes.
the CC companies will have a legal right to be paid from his share of the assetts.

NickX

This unfortunate situation does come up fairly regularly.

Probate is a complex business and it is certainly not clear cut as to whether the Credit Card company can make a claim on your property for the debt.

The answer is locked away in all the financial paperwork of the deceased, and paperwork associated with the property.

As jonesMUFCforever has suggested, it is really one for your solicitor to answer.

Good Luck.

noh

CLAPTON wrote: »

I would council caution here; you need to discuss this with your legal advisor... these assetts may well not count for IHT purposes but they are not exempt for debt purposes.
the CC companies will have a legal right to be paid from his share of the assetts.

I agree that op should take legal advice.
As I understand it jointly held assets count for IHT purposes but do not count as part of the deceased estate.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093

Nigel

CLAPTON

noh wrote: »

I agree that op should take legal advice.
As I understand it jointly held assets count for IHT purposes but do not count as part of the deceased estate.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013093

Nigel

I'm not sure what you are saying but your reference says that creditors can claim from 'joint tenant' property up to five years after the death... is that what you meant?

noh

All I'm trying to say is that jointly owned property does not automatically become part of the estate of a deceased person.
So in this case the estate will be insolvent.
The creditor or the legal representatives of the estate can apply to a court for an insolvency administration order which if successfull will have the effect of bringing jointly owned property into the estate.
Another option is for the the executor of the estate to negotiate with the creditors.
Whatever happens the original poster is not liable for her deceased husbands debts.

http://www.hmrc.gov.uk/manuals/insmanual/ins1703.htm

Nigel

noh

To clarify. It's likely that card companies will need to be paid back some or all of the money owing but that will only be after they have successfully applied for an insolvency administration order and your house is sold or if an agreement is arrived at between them and the executor.

Nigel

jonesMUFCforever

And if the property is in 'tenants in common' as opposed to 'joint tenants'.

As I have said this is a legal minefield - 3 different opinions from 3 people confirms this.

Please seek legal advice urgently.