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Payment of debt prior to probate being granted

(3 Posts)
FinancialScents Wed 19-Oct-11 11:49:29

I am posting this in both Legal Matters & Money Matters. Have namechanged, but am sure some people will recognise me - I've done so just to go some way to protect personal identity.

My DH died a few months ago. Obviously on his death all of his assets were frozen, so I could not touch any of his money (bank account in his name only) other than pay funeral expenses. Probate was granted a couple of months ago and all is fine. But something has been really bugging me.

DH had a credit card with his bank and had about £2k owing on it. Initially the bank wrote to me to say they thought he had insurance on it and that when I had Grant of Probate I should send them a copy and the balance would be paid. A month or so later (before probate was granted), they wrote again to say sorry, they made a mistake. There was no insurance and therefore they had transferred the money from his (otherwise frozen) bank account to pay it.

Now, thus far I have done nothing about it. But the more I think about it, the more pissed off I am. How come the bank could touch my late husband's assets but I couldn't? Is this really legal? Why, if all assets are frozen on death, aren't all debts also frozen? There seems to be a real imbalance here. If it is legal, is it really ethical? Thankfully I am in an ok financial position, but supposing I wasn't? Does paying off a credit card really take precedence over everything else? Over his widow and his small children? To me this stinks of banks doing everything to get their money, bugger everyone else in their wake. I don't like it and something is going to change - it has to.

Perhaps this is more of a rant from me but I would be really grateful to hear from any legal or financial experts and understand how the bank could do this.

Thank you in advance for any help you can give smile

catsrus Wed 19-Oct-11 20:16:45

IIRC from dealing with my parent's estates, you have to pay debtors before the estate goes to heirs, so it is probably legal but a bit hasty in the circumstances i think.

& the banks were the most difficult of all the institutions I had to deal with!

FinancialScents Wed 19-Oct-11 20:52:31

Thanks for your post cats. Following a link posted on my other thread to the website I commented the following:

Personal loans, credit cards and credit debt
Repayment of these debts must wait until others have been settled. If cards are held jointly, any debts will be the joint holder's responsibility - but check to see if you're covered by a payment protection plan.

Bank account
If this was in the person’s sole name, no one will be able to touch the money until the estate is sorted out. If you had a bank account in joint names, you can still usually use the account.

So therefore, I believe the bank was wrong to grab the money for the credit card debt from DH's current account before probate was granted: the bank could not have possibly known whether or not other, higher ranking, debts were outstanding. The more I think about this, the angrier I get. It is little wonder banks have such a bad reputation for being greedy, money grabbing bastards at the moment.

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