Help please - Debt from an estate due to bereavement

[700633744]

Hi there,

 

I would appreciate some help with the following please:

 

My father passed away last month. Since then I have assumed the role as will executor. On looking at my father accounts I soon reliased that he was actually 40k in debt to 5 credit card companies and 1 business bank account: he was still paying these accounts off but most of them had gone to DCA's. To stop the DCA'S harrassing my mother as the accounts obviously hadnt been paid, I have contacted them all and informed of the death and informed that I am the estate executor. The estate will include an insurance pay out which will obviously be eaten up by the debts which my father had kept hidden. I have gotten myself a solicitor for probate and he has suggested just paying the debts off - something which I will do if they are legal debts (40k is a lot just to write off from my mother inheritence)

 

I have sent an adapted cca request to all of ther oprginal debtors - adapted to say that my father has died, I am the will executor and dealing with the estate and also asking them to write the debt off. These were sent on the 18th May rec delivery. I have only had 2 responses so far - one ackowledging the letter saying that they need to know who is dealing with the will execution (which the letter told them) and another saying they need a signed grant of probate and that i cant have the cca's. They have all had a copy of the death certificiate too.

 

What do I do next with the 2 that have replied and also the ones that haven't.

 

my solicitor just wants to pay them out from the insurance policy - I dont, I want them to prove the debts etc. The credit card appear to be years old - ie mainly 10-15 years old

 

Any advice greatly appreciated as I am in over my head. Any long term advice would also be great ie next steps in different scenarios

 

Many thanks

[spamheed]

Sorry for your loss and please excuse my bluntness

 

Obviously the solicitor just wants to get it sorted and done as quickly as possible, understandable really, less work for them.

 

As executor, you are under a legal obligation to ensure any claims on the estate are legitimate and lawful. However, there is a part of me which would simply say any demands should be made to the persons named on the agreement and to no other, in other words the debt died along with your father

 

My own opinion would be to follow up on the CCA requests with a proviso that if they are unable to furnish the documentation within the lawfully allowed timescales then the estate will carry no liability to settle a disputed debt (which is what they will become without the CCA being furnished)

 

As the debt was in the name of the fathere, effectively the debt dies when the estate is distributed in line with the will, the debts cannot be transferred to any of the beneficiaries

[cerberusalert]

Send a sar to each of the creditors, these will cost £10 each but you can claim this back from the estate. If he had more than one a/c with a creditor one sar covers them all.

 

You should get back copies of agreements, statements showing any PPI or unfair charges you can reclaim. Obviously if any of the agreements are unenforceable they can whistle.

[cerberusalert]

Don't be hassled by any of these creditors or DCAs they can do sweet FA whilst the Estate is being settled.

[Mozz1]

Hello. If the estate is insolvent then you should not apply for the Grant of Probate. Let the creditors apply to be the Administrators if they wish to, which they can do. However, make it clear to them that the estate is insolvent. If it is, then you are under no obligation to settle the debts.

 

The debts that come in prioroty are the funeral and legal costs. Other creditors then get to share what's left. If there is nothing in the estate, then the debt cannot be paid. I assume these accounts were not joint with your mother.

 

Do not offer to pay the debts if they were in your father's sole name. Let them apply for the Grant of Representation. I think the legal advice you have received is flawed.

[Bazooka Boo]

Sorry to hear of your loss, this may be of some help?

What happens to debts when someone dies? : Directgov - Money, tax and benefits

[700633744]

wow, thanks all for the timely and extremely helpful reponses. just to ellaborate a bit more -

 

The will - names my mother as beneficiary but also says that my dads debt should be paid (the will is c20 years old). So everything goes to my mum alone - no problem.

 

The life insurance (big problem and a real eye opener) - no named beneficiary on the insurance policy so it goes to the estate enabling the debtors to ask for there chunk. however, there would (as its stands) be a suplus for my mother if all debts had to be settled so the estate is not insolvent.

 

- From what I can gather so far - I am right to dispute the debts until the debtors prove otherwise ie cca.

- My next step should be to advise the debtor that as they have failed to provide the will executor with sufficient proof of the acct via the cca request in the agreed timescale then they have invalidated any claims etc

- Possibly send a CCA request to all parties?

 

Thanks

[ScarletPimpernel]

If you send a SAR, take a look at the ICO website first - it gives a form of words to use in these circumstances which makes clear that you are entitled to submit the request.

 

You don't say whether the DCAs have bought the debts, or if they are just acting for the original creditor. If the former, then you may want to consider, in the fullness of time, and once you are satisfied as to the legitimacy of their claim, making a full and final offer - start at 15%.

 

In the latter case, cut the DCAs out of the loop and deal directly with the original creditor. Almost all financial companies have a department that deals with deceased accounts, and these wil often write debts off; in some cases the collections gang will have try at getting something first, but persistence wins the day.

 

You are quite right to resist the solicitor's blandishments to go down the path of least resistance; he may need to be reminded that he takes instruction from you, not the other way around.

[700633744]

I have contacted the original creditors with the cca's and also verbally informed the dca's

[unclebulgaria67]

Yes you have the right to verify the debts to ensure they are legit. It would probably be best to discuss this with your solicitor, so you can work together on this. The solicitor will need to provide an account of the estate for probate purposes and these debts will I presume have to be included as a liability. This is probably why the solicitors sees this as a straightforward case of just paying these as they don't want to delay matters.

 

You have to be careful in regard to any joint assets, as creditors can look to your mother for payment.

[Jasper1965]

I understand that it's still an option that the OP posts a notice pursuant to Section 27, Trustee Act 1925 in the London Gazette inviting creditors to enter a claim against the estate.

 

Such a notice places the burden of proof of entitlement upon the claimant.

 

Protection by means of advertisement

27.--

 

• (1) With a view to the conveyance to or distribution among the persons entitled to any real or personal property, the trustees of a settlement or of a disposition on trust for sale or personal representatives, may give notice by advertisement in the Gazette, and [in a newspaper circulating in the district in which the land is situated] and such other like notices, including notices elsewhere than in England and Wales, as would, in any special case, have been directed by a court of competent jurisdiction in an action for administration, of their intention to make such conveyance or distribution as aforesaid, and requiring any person interested to send to the trustees or personal representatives within the time, not being less than two months, fixed in the notice or, where more than one notice is given, in the last of the notice, particulars of his claim in respect of the property or any part thereof to which the notice relates.
  (2) At the expiration of the time fixed by the notice of trustees or personal representatives may convey or distribute the property or any part thereof to which the notice relates, to or among the persons entitled thereto, having regard only to the claims, whether formal or not, of which the trustees or personal representatives then had notice and shall not, as respects the property so conveyed or distributed, be liable to any person of whose claim the trustees or personal representatives have not had notice at the time of conveyance or distribution; but nothing in this section--
  
  • (a) prejudices the right of any person to follow the property, or any property representing the same, into the hands of any person, other than a purchaser, who may have received it; or
    (b) frees the trustees or personal representatives from any obligation to make searches or obtain official certificates of search similar to those which an intending purchaser would be advised to make or obtain.
    

   

 

Link http://www.london-gazette.co.uk/place-notice/personal-legal/deceased-estates

 

 

The DCA will have a defined notice period (2 months I believe) during which to make their claim. Of course not many DCA's probably correlate LG notices against their 'client' database, in the event a creditor did make a claim then they must then prove entitlement which forces them to produce the documentation you seek.

Edited June 3, 2010 by Jasper1965

[rameses_qc]

All this is correct. Creditors must PROVE that the debt exists, and that they're entitled to collect it. You DO NOT have to provide them with a copy of the signed probate. The info you've given them is enough. If they want a copy of the probate, they can get one for themselves. If they want to mess about like the idiots they are, full of their own importance, tell them that if they don't furnish proof of the debt, they won't get anything. I think your solicitor is being a bit previous in telling you to pay without any proof

[700633744]

Thanks, yes the solicitor mentioned paying for this advert to prevent any further claims on the estate for debts i dont know about: I will be doing this definately.

 

Thankfully there are no joint assets or debts - mums house is hers and not dads

[rameses_qc]

PS You can pay yourself out of the estate for things like advertisements in London Gazette and any other reasonable expenses you incur as an executor

[Mozz1]

I understand that it's still an option that the OP posts a notice pursuant to Section 27, Trustee Act 1925 in the London Gazette inviting creditors to enter a claim against the estate.

 

 

Section 27 won't help. All causes of action subsisting against the deceased at hios death survive against the estate and the PRs stand in the deceased's shoes and so must discharge the debts liabilities. Therefore, the PRs are liable for debts of which he has no notice.

 

However, Section 27 ("statutory advertisements") assists where the debts are not known to the PRs and if so, they can escape liability by advertising in accordance with the s.27 Trustee Act 1925 criteria. Under this provision the PRs "give notice" of their intention to distribute the assets and require any unknown creditors to send particulars of their claim to the PRs within not less than 2 months of the date of the advertised notice.

 

I do not think in this instance any of the debts have not been disclosed to the PRs. However, a s27 notice should be placed because there is a risk of other creditors existing of whom we have no prior knowledge and s27 will have them barred if they don't come forward within the 2 months.

[700633744]

really helpful thanks

 

I will keep updating this thread as I imigine this will drag on for a few months

[BuzzMan]

Creditors cannot do anything unless explicitly permitted by the court - CCA 1974 §86

[700633744]

sorry Buzzman - i am a little confused: does this mean that the only way for them to do anything is to get me in court etc?

[BuzzMan]

sorry Buzzman - i am a little confused: does this mean that the only way for them to do anything is to get me in court etc?

 

Depends on the circumstances, and your solicitor should advise you on those. In essence, yes, but it would not be for a CCJ, just an order enforcing the agreement against named parties.

[700633744]

in terms of my mother being the beneficiary - would this scenario ulimately impact her credit rating etc do you know if an order was imposed?

[BuzzMan]

in terms of my mother being the beneficiary - would this scenario ulimately impact her credit rating etc do you know if an order was imposed?

 

The order is not "imposed" per se, as far as I understand, the order would only make a third party party to the agreement... Of course if the Termination Notices have been served, the scenario is different - there is no party to attach to a contract that is already terminated, so you really need to discuss this with a solicitor who knows their way around CCA

[700633744]

nice one thanks

[spamheed]

If the debt is solely in the names of your father then your mother is not liable at all. any liability would be placed on the Executor of the estate until such time as the estate is settled. At no time could your mother be held liable for the sole debts of your father.

 

An order to pay named parties would need to have a damned good reason. ie "we haven't been paid" simply wouldn't be sufficient as long as the estate was discharged correctly

[700633744]

UPDATE - 2 months from my original cca requests (and one reminder later) I only have 2 confirmed responses with the required details. I have however, had 2 letters from 2 companies ackowledging the letter and saying that they intend to close the account: what does this mean? will the debts be written off or will they close the account and still chase the money without giving me the information which I requested 2 months ago? What are remifications of a company not gving me the information that I requested 2 months ago etc?

 

thanks

[spamheed]

Keep copies of any letters they may send to you.

 

If they tell you that they are closing the account, effectively they are writing off the account and can enter into no further enforcement action.

 

since effectively the debtor is deceased.

 

Although you as executor have a responsibility to resolve any legitimate liabilities, you would be acting outside of those with a legitimate claim by waiting too long for these "people" who have yet to prove their claim to provide you with evidence of their claims.

 

When you made the CCA requests did you stipulate any timescale or deadline before you "move on"?

 

If you haven't done so yet, I would suggest that you send a letter to each of those who have yet to substantiate their claim reminding them of your request and stipulating such a timescale/deadline.

 

It may be worth taking advice on how long such a timescale/deadline to provide proof and validity of the liability