Mumsnet Talk

If someone dies with shed loads of debt, is that debt passed onto family members?

What about if that person has property and dies with tons of debt, does the property have to be sold to pay of that persons debt.

or does the debt die with them?

ime debt doesn't die with someone.

I don't think it would be passed to family members though, it would have to come out of the persons estate.

If they have assets...property, business etc in their sole name, yes it can be used for debts. If they have jointly owned property, then only their share, whatever it is, can be used to cover the debt.

The creditor makes a claim against the debtors estate.

Family members would not be liable, unless it was a jointly held credit card etc. Then they would need legal advice.

CAB can advise you it you are in the above position.

According to this they would come out of their estate.

PS If their are insufficient funds then the debt would die with them.

Thanks.
Equally, if a wife dies, everything automatically goes tot he husband yes?

Wife to husband: will follow provisions of the Will (unless successfully challenged) or follows normal intestacy rules, in which case husband and children will inherit.

But debts have to be settled from the estate before anything is passed on. If the debts eat up the entire estate, nobody gets anything; but any debts above the amount that is left have to be written off. There are set rules about the order in which creditors must be paid.

Not necessarily.

I am assuming there is no will. In that case, after debts have been paid, if there are children the husband would get the first £250,000. The remainder of the estate is split in half. One half goes to the children (or their descendants if they are dead). The husband would have a life interest in the other half. That means he gets the benefit of that part of the estate but cannot sell it or get rid of it. The portion of the estate in which he has a life interest will go to the children when he dies.

If there are no children but the wife has surviving parents, brothers, sisters, nephews or nieces the husband will get the first £450,000 and half the remainder of the estate.

I would strongly recommend making a will.

As prh47 says, the surviving spouse does not automatically inherit everything if there is no will.

So far as debts are concerned, the residuary estate can not be distributed until all debts, funeral expenses, inheritance tax and testamentary expenses have been cleared, or at least ringfenced.

The only way to be sure that your wishes will be carried out is to make a will. If anyone's interested, I have a paid for ad over on Small Business Classifieds ("5* Will Writing service recommended by Mumsnetters").

Debt does not get passed on, it all depends if the deseased has any assets, and on the size of them and attittude of person to whom the debt is owed.

A couple of RL examples:

FIL died leaving 11k credit card debt, only way to have this paid would be to force his widow to sell the house. The CC co wrote the debt off.

My sister died leaving debts but no assets - all debts written off.