A question about : Mother died with debt and no estate. Help needed
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 Ј2/3k 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.
Best answers:
- 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. - 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:
https://www.bereavementadvice.org/pro...entestates.php - Firstly may I add my condolences at this difficult time.
It is vital that you consider seeking advice of a solicitor when dealing with an insolvent estate. There are complicated and strict orders in which debts should be paid, if done incorrectly you could incur personal liability.
It may be possible to ask for advice in the citizens advice board on these forums. - 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. - 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 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. - As there isn't a will, you don't have any legal obligation to sort out the finances. You can arrange and pay for the funeral and leave any left-over money in her account and walk away from it.
Debts can't be paid if there's no money. - Was I right in calling all the companies to say she died? Some took my name and phone number, others didn't
- I know this is a difficult time, and it will be difficult to grasp the situation.
Do you know anyone that has dealt with this sort of thing before?
Legaly, no one is responsible for sorting out an estate even named executors in a will can refuse to do anything.
it is a volutary position that people can decide they will take up, there is an order of priority of those that are eligable eg(might not be the right order) named executors, blood relative, benifitiaries, creditors...
With an insolvent estate there is no reason to do the job unless you are a creditor and can recover some money.
Back to your situation,
Initialy I would stop at the notification of the death to any interested party.
(keep a track of any costs doing this it is a priority debt on the estate)
Telling people/companies is OK, be ready for them to try and get you to pay things, you don't have to
Are you going to register the death, if you do consier getting a few extra copies.
At this point I would hold off sending or taking in death certs before getting some advise on how to deal with the next step.
As I said before you need to establish id the life insurance is part of the estte or not before you get any access to the money.
same with any money in a bank accounts best to just leave it where it is.
funeral expences are a priority debt so you may be able to access the money for that but normaly you don't want to get it yourself, ideal is direct to the funeral director.
(even this is something you don't have to do but I think you want to)
I think an appointment with cab or other advice organisation is important you need some personal contact to deal with this.
Remember there is no rush if solicitors deal with solvent estates bill don't get paid for months/years so ingore any demands..
As for the flat if there realy is nothing of value then again you don't need to do anything you are not even resonsible for clearing the place allthough you might want to check for anything of sentimental value.
DO NOT PAY ANY DEBTS even if someone says you are liable. - Thanks
Can't make an appointment with CAB as they aren't open until Wednesday
In regard to the life insurance, it would need to be paid to me wouldn't it either way? There would be some left over that would need to go back to the creditors though
Will have to see someone. Anyone have any idea how much a solicitor would charge for this kind of thing?
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