General question ...!

[luluj]

Having just returned from a traumatic weekend of spending most of it in intensive care with a friend who I class as my surrogate dad.......it really doesn't look good and his daughter has spoken to me today about what happens with his debts, all in his name after he passes away.....there are no savings between him and his wife, and the debts are just in his name. The only money they have is in the family home......

sorry to be thick, not thinking straight.....what happens to these debts ?

[kallis3]

Sorry to hear that Liz. Thoughts are with you there.

His debts should either be covered by his estate (if he has any money due to him) or be written off if there is nothing.

Hopefully one of the experts can assist further.

[luluj]

Definately no pots of gold sat anywhere, other than equity in the family home which is in joint names with his wife.

I know he has an overdraft and a couple of store cards not totalling alot but enough.

There is no way his wife could afford to pay his debts back as well as her own...she too has overdraft and store card debts.......

There is more than enough equity in the house to cover the debts, but selling the house and going smaller is not an option as already in a small house....

Any advice would be good !

[kallis3]

Sorry I can't help you Liz, wish I could.

[plasticdaft]

What happens to debts when someone dies?


When someone dies, any debts they leave are paid out of their 'estate' (the money and property they leave behind). You're only responsible for their debts if you had a joint loan or agreement or provided a loan guarantee - you aren't automatically responsible for a husband's, wife's or civil partner's debts.
The estate
A person's estate is made up of their cash (including from insurance) and investments, property and possessions.
After someone dies their estate is handled by one or more 'executors' - or an 'administrator' if there wasn't any will. These are usually a relative or friend and/or a solicitor.
If the estate's worth more than a certain amount the executor or administrator will need special permission - called 'probate' or 'letters of administration' - to be able deal with the person's affairs. This includes paying off their debts.
What is probate? (Government, citizens and rights section)
What happens if there's not enough money to pay off all debts?
In this case, the estate has to pay off any outstanding debts in a set order before anything is given to people named in the will, or until the money runs out.
Dealing with a deceased person's money and property
Debts if you owned a home together
If you jointly owned your home and there's not enough money elsewhere in the estate to pay off the deceased person's debts, there is a chance that your home would have to be sold. Your options to avoid a sale depend on whether you owned it as 'tenants in common' or 'joint tenants'.
'Tenants in common'
If you were ‘tenants in common’, each of you owned a stated share of the property. The share belonging to the person who has died becomes part of their estate and goes to whoever is mentioned in their will. But if there are outstanding debts these must be paid first from that share.
To avoid a sale of the home, you and/or anyone due to inherit the second share will need to try to negotiate with those owed money ('creditors') and find the necessary money.

All lifted from the directgov website.

Hope it helps.

Paul

[kallis3]

Thanks Paul.

I was under the impression that you had to have probate anyway regardless of how much was involved in the estate.

For example, when my parents die there won't be an awful lot of money at all (no house, living on pension and benefits) so presumably I wouldn't have to have probate.

Interesting.

[plasticdaft]

I didnt know half that was on their either. Its not something you really want to delve into unless you have to.

Paul

[kallis3]

Definitely not!!!!

[Foggy]

I dealt with my mum's affairs and didn't require probate.

[luluj]

Thanks Paul for the information-much appreciate the time !

Things have taken a turn today and it is just time unfortunately, but now is not the time to raise this with the family direct, but at least I am now prepared and can see what financial help I can offer to them.

[plasticdaft]

No problem Liz,it took no time at all,but only because I knew where to look. Hope things dont linger on too much.

Paul

[Struzzo39]

Thinking of you Liz xx

[luluj]

He's a fighter ! Still hanging in there but all treatment has been stopped...a matter of time ! thanks for your support x

[kallis3]

Thinking of you Liz.

[luluj]

Received the news first thing this morning that my very special friend had past away - devastated....cannot believe how emotional and upset I am considering we have known the for the last week it was happening....he was such a special man x