Mother died with debt and no estate. Help needed

heatherw_01 · 29 December 2012 at 12:04AM

My mum died and she was in debt with many credit card, loan and debt agencies.

She took out a few life insurance plans which I know that once the funeral has been paid for, the rest will have to go to them.

Can anyone advise as to the following;

1. There is no value in her rented flat and she only has a few hundred in the bank. I will have to give the flat back to the landlord before I even get the death certificate, so if the debt people need to know the value of her property, will they believe me as to her items have no value or do I need to get someone to prove it?

2. She lived in a different city to me. Do I need to get a funeral director; near to her, near to me or near to where I want her buried/the service?

3. Do I keep receipts from the life insurance people showing how much they gave me and how much I spent on the funeral so that when they take the rest I can prove how much I spent? I think I pay for the funeral before I pay the debt people?

4. Who do I pay first? debt collectors, loan, credit cards?
There are tens of thousands of pounds of debt but only maybe £2/3k life insurance from the different policies before funeral. Do I give any money left all to the first company I pay for spread it out?

I know I can't keep any of the life insurance money that might be left over as they would find out wouldn't they? Same goes for bank balances such as pensions I assume?

I already told the companies she passed away, but won't get the death certificate until next week so I can't send it onto them until then.

I know there are a few questions there, but if anyone could help as citizens advice isn't open for a few days.

getmore4less · 29 December 2012 at 12:29AM

If the life insurance are in trust to you then they may fall out of the estate.

I would seriously consider not getting involved with the administration of the estate other than to notify of the death and funeral, it could be nothing but hastle if it is insolvent.

cte1111 · 29 December 2012 at 12:32AM

Condolences of your loss.

Re the debts, I think you add up the total debts, then divide the money in the estate proportionally between the creditors. That's presuming the debts are all unsecured, which it sounds like, as she didn't own her flat and you haven't mentioned a car.

Here's some advice:
http://www.bereavementadvice.org/probate-and-other-legal-procedures/insolventestates.php

madbadrob · 29 December 2012 at 3:32AM

getmore4less wrote: »

If the life insurance are in trust to you then they may fall out of the estate.

I would seriously consider not getting involved with the administration of the estate other than to notify of the death and funeral, it could be nothing but hastle if it is insolvent.

I totally agree with this. Be easier to grieve without the worry of this hanging over your head.

Rob

heatherw_01 · 29 December 2012 at 12:15PM

getmore4less wrote: »

If the life insurance are in trust to you then they may fall out of the estate.

I would seriously consider not getting involved with the administration of the estate other than to notify of the death and funeral, it could be nothing but hastle if it is insolvent.

The life insurance plans (there are 3) are like over 50 plans. How would I find out if the companies could take them or not?

I have already contacted the companies to say she died but that is all so far. The estate though is just a rented flat with no valuables in.... is it really worth getting a solicitor involved?

cabbage · 29 December 2012 at 2:47PM

hi
I'm sorry to hear your mum has died.

have a word with CAB/Payplan/Step Change first before going to the expense of a solicitor. Also have a look at https://www.nationaldebtline.co.uk

As other posters have said, You need to work out what is left after paying any priority debts such as rent inc any arrears, council tax, gas, electricity, secured loans and any overpayments of benefits (some are in the pipeline and cannot be stopped so still may be paid after death). Once the priority debts are out of the way, then non priority debts get a share of what's left. The biggest non priority debt will get the biggest share of the money thats left after priority debts have been paid.

If you feel you can't do this, get help from CAB or similar who will be able to tell you how much you should pay each one and whether they are priority or non priority debts.

getmore4less · 29 December 2012 at 4:12PM

You DON'T have to do anything.

There is no requirement to deal with an insolvent estate.

If there are no net assets, why get involved other than to get the funeral if you want.

The only assets seem to be life policies establish if these are in trust or assets of the estate.

Be very carefull instructing solicitors you could be come liable for a bill, they won't be interested in an insolvent estate.

Is there a will with named executors?

getmore4less · 29 December 2012 at 4:19PM

cabbage wrote: »

hi
I'm sorry to hear your mum has died.

have a word with CAB/Payplan/Step Change first before going to the expense of a solicitor. Also have a look at www.nationaldebtline.co.uk

As other posters have said, You need to work out what is left after paying any priority debts such as rent inc any arrears, council tax, gas, electricity, secured loans and any overpayments of benefits (some are in the pipeline and cannot be stopped so still may be paid after death). Once the priority debts are out of the way, then non priority debts get a share of what's left. The biggest non priority debt will get the biggest share of the money thats left after priority debts have been paid.

If you feel you can't do this, get help from CAB or similar who will be able to tell you how much you should pay each one and whether they are priority or non priority debts.

Why bother with all that work, let one of the creditirs administer the estate if they think it is worth it.

Your list of "priority debts is wrong. even HMRC and DWP joint the rest.

heatherw_01 · 29 December 2012 at 7:49PM

cabbage wrote: »

hi
I'm sorry to hear your mum has died.

have a word with CAB/Payplan/Step Change first before going to the expense of a solicitor. Also have a look at https://www.nationaldebtline.co.uk

As other posters have said, You need to work out what is left after paying any priority debts such as rent inc any arrears, council tax, gas, electricity, secured loans and any overpayments of benefits (some are in the pipeline and cannot be stopped so still may be paid after death). Once the priority debts are out of the way, then non priority debts get a share of what's left. The biggest non priority debt will get the biggest share of the money thats left after priority debts have been paid.

If you feel you can't do this, get help from CAB or similar who will be able to tell you how much you should pay each one and whether they are priority or non priority debts.

I am so confused with it all. Once I get the life insurance and paid for the funeral, there will be only about £1k left and about £20k debt
I feel like crying because I don't understand what to do

heatherw_01 · 29 December 2012 at 7:50PM

getmore4less wrote: »

You DON'T have to do anything.

There is no requirement to deal with an insolvent estate.

If there are no net assets, why get involved other than to get the funeral if you want.

The only assets seem to be life policies establish if these are in trust or assets of the estate.

Be very carefull instructing solicitors you could be come liable for a bill, they won't be interested in an insolvent estate.

Is there a will with named executors?

I must have to do something? There is no estate... it is a rented flat with no value in it. There is no will either

spacey2012 · 29 December 2012 at 7:54PM

I would have a 1k better funeral.
The debts can go whistle, have a last life at the leaches that sucked your mum dry.
They can not come after anyone else if the estate is insolvent.
What is left after funeral costs is the estate.

Mother died with debt and no estate. Help needed

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