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  • FIRST POST
    • e_miij
    • By e_miij 4th Jul 19, 9:31 AM
    • 5Posts
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    e_miij
    Can inheritance help with debt situation before it comes through?
    • #1
    • 4th Jul 19, 9:31 AM
    Can inheritance help with debt situation before it comes through? 4th Jul 19 at 9:31 AM
    After a series of bad decisions I am in a bit of a debt hole where I owe a few thousand pounds (across overdrafts, bank loans, payday loans, Argos card, and credit cards) and I am repaying over £300 a month which is really difficult as I only earn just above minimum wage.

    I have been taking various steps to sort my finances out including moving to a new city next month where my rent will be roughly half of what it is now.

    My father died about six weeks ago (aged 48, which has been absolutely devastating and incredibly difficult to cope with). I am the sole beneficiary and executor of his estate. He owned a house and other assets in total worth around £300,000. However there are complications so sorting out the estate won’t be a quick process. I can imagine it’ll be a year before I get that money in my account, at which point I’ll pay off my debts, buy a house outright and hopefully never be in debt again.

    Is there anything I can do in the meantime to reduce my debt burden? Can I borrow against the estate at a reduced interest rate to reduce my monthly payments? Or any other solutions?

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    Last edited by MSE Tine; 10-07-2019 at 8:16 AM.
Page 1
    • Mojisola
    • By Mojisola 4th Jul 19, 9:39 AM
    • 31,176 Posts
    • 79,999 Thanks
    Mojisola
    • #2
    • 4th Jul 19, 9:39 AM
    • #2
    • 4th Jul 19, 9:39 AM
    My father died about six weeks ago (aged 48, which has been absolutely devastating and incredibly difficult to cope with).

    I am the sole beneficiary and executor of his estate. He owned a house and other assets in total worth around £300,000.

    I can imagine itíll be a year before I get that money in my account
    Originally posted by e_miij
    Have you asked the executors if they will do an interim payment that will let you pay off some (or all) of your debts?

    If there is enough spare cash, they should seriously consider your request.
    • e_miij
    • By e_miij 4th Jul 19, 9:48 AM
    • 5 Posts
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    e_miij
    • #3
    • 4th Jul 19, 9:48 AM
    • #3
    • 4th Jul 19, 9:48 AM
    I am the executor named in the will, I've hired a solicitor who's sorting out the probate and some other issues. I suppose I should ask my solicitor whether I can take some of the cash out of the estate straight away. I had asked another friend who used to be a solicitor whether that would be possible and she seemed to think it wouldn't be possible for a few months but I don't fully understand why. I'll ask my actual solicitor.
    • iolanthe07
    • By iolanthe07 4th Jul 19, 10:19 AM
    • 5,200 Posts
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    iolanthe07
    • #4
    • 4th Jul 19, 10:19 AM
    • #4
    • 4th Jul 19, 10:19 AM
    The reason executors are reluctant to release funds until probate has been granted is that they can't be absolutely sure what debts will have to be paid out of the estate. There have been cases where executors have had to cough up out of their own money to pay debts on the estate that weren't immediately apparent.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • Mojisola
    • By Mojisola 4th Jul 19, 10:46 AM
    • 31,176 Posts
    • 79,999 Thanks
    Mojisola
    • #5
    • 4th Jul 19, 10:46 AM
    • #5
    • 4th Jul 19, 10:46 AM
    I am the executor named in the will, I've hired a solicitor who's sorting out the probate and some other issues. I suppose I should ask my solicitor whether I can take some of the cash out of the estate straight away. I had asked another friend who used to be a solicitor whether that would be possible and she seemed to think it wouldn't be possible for a few months but I don't fully understand why. I'll ask my actual solicitor.
    Originally posted by e_miij
    Probably because you'll need to wait for probate to come through before distributing any money - once that's through and if there is money available, do an interim payment.

    Don't leave the estate sort of funds - there will be all sorts of expenses before the property is sold.
    • Larac
    • By Larac 4th Jul 19, 11:52 AM
    • 882 Posts
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    Larac
    • #6
    • 4th Jul 19, 11:52 AM
    • #6
    • 4th Jul 19, 11:52 AM
    We did an interim payout around six months after my Mum's death. My brother was Executor of the will and by that time had a handle of the 'Estate P&L' She had quite significant cash + property - we agreed on an amount but also left in the bank a sum to cover sale of the flat, conveyancing, service charges and Council Tax as you become liable to pay this at the full rate after six months following grant of probate. ( In our case we left 3 years of running costs for the flat in the account as we had a retirement flat to sell which are notoriously difficult to sell)
    • markandkate
    • By markandkate 9th Jul 19, 9:55 PM
    • 841 Posts
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    markandkate
    • #7
    • 9th Jul 19, 9:55 PM
    negotiate
    • #7
    • 9th Jul 19, 9:55 PM
    If you can get an interim payment, and you should be able to if there is cash as well as property, then you should negotiate a percentage offer in full and final settlement rather than paying the full amount. You would say that you have received a small inheritance which may cover some debts but not in full and make an offer of say 60% of the debt and see what they say
    • Bellisima
    • By Bellisima 10th Jul 19, 8:03 AM
    • 125 Posts
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    Bellisima
    • #8
    • 10th Jul 19, 8:03 AM
    • #8
    • 10th Jul 19, 8:03 AM
    I would ask your solicitor. He/she must come across this sort of thing often. It does take a while to sort the Probate, but the biggest delay may be trying to sell the house, or it was in our case. Took 10 months to sell my dear mums house.
    • anniecave
    • By anniecave 11th Jul 19, 12:14 PM
    • 2,277 Posts
    • 740 Thanks
    anniecave
    • #9
    • 11th Jul 19, 12:14 PM
    • #9
    • 11th Jul 19, 12:14 PM
    If you can get an interim payment, and you should be able to if there is cash as well as property, then you should negotiate a percentage offer in full and final settlement rather than paying the full amount. You would say that you have received a small inheritance which may cover some debts but not in full and make an offer of say 60% of the debt and see what they say
    Originally posted by markandkate
    I'm sorry for your loss.

    I wouldn't recommend lying to any lenders. I would feel free to ask about full and final settlement offers as they may settle for less than the full amount but I wouldn't say that I am due to receive only a small amount if the amount is actually due to be paid is more than enough to pay off the debts.
    Indecision is the key to flexibility.
    • Takmon
    • By Takmon 11th Jul 19, 3:39 PM
    • 682 Posts
    • 669 Thanks
    Takmon
    If you can get an interim payment, and you should be able to if there is cash as well as property, then you should negotiate a percentage offer in full and final settlement rather than paying the full amount. You would say that you have received a small inheritance which may cover some debts but not in full and make an offer of say 60% of the debt and see what they say
    Originally posted by markandkate
    Why would they want to have a negative marker on their credit report by only paying off part of the debt when the total is only a few thousand?
    • ChasingButterflies
    • By ChasingButterflies 11th Jul 19, 9:04 PM
    • 937 Posts
    • 7,863 Thanks
    ChasingButterflies
    Really sorry to hear of your recent loss.

    Have you had the opportunity to check and see if there is any pensions and or life insurance? These don’t normally for part of the estate and can be released to beneficiaries before the will is finalised. Just a thought.
    • getmore4less
    • By getmore4less 11th Jul 19, 10:12 PM
    • 36,615 Posts
    • 22,548 Thanks
    getmore4less
    What are the complications?

    Where is the house could you live in it?
    • enthusiasticsaver
    • By enthusiasticsaver 12th Jul 19, 2:41 PM
    • 8,756 Posts
    • 20,305 Thanks
    enthusiasticsaver
    Normally the only expenses you can pay out of an estate before you get probate are funeral expenses.

    If the house is in an area local to you it should be possible for you to move into it to save on rent.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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