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Debt owed to deceased's estate above small claims court limit - any advice?(13 Posts)
My sister and myself are executors for our mum who died last year.
So far we have managed to obtain probate, make gifts to the beneficiaries detailed in the will and have nearly completed dealing with her estate without the need to use solicitors.
The only thing that is outstanding is a loan that she made to a "friend" that was to be paid back on a monthly basis at a rate of £500.00 per month.
Since our mum died over a year ago no payments have been forthcoming despite giving the debtor new bank account details. We have tried to negotiate in letter and via telephone suggesting that if £500.00 per month is too much that we would accept realistic smaller payments.
There is no formal paperwork for the debt (yes we know!) What we have is a cheque stub written out saying loan and the person's name, regular direct debit payments into our mum's bank account with a reference that says persons name loan repayment and correspondence from the person agreeing that there was a loan but she won't pay any more back, rather she will make a donation to a charity of her choice as she feels this is what our mum would have wanted.
Mum told both my sister and myself about this debt and the terms of repayment well before her death, her death was sudden and unexpected.
The issue:- the original loan was for £20,000. Up until June last year 14 repayments have been made - leaving £13,000 outstanding - please ignore the issue of interest.
This is above the small claims court limit of £10,000.
Do we now need to involve a solicitor to issue county court proceedings or is this something we could do ourselves? We have managed to negotiate probate and HMRC and ideally don't want to pay for solicitors unless tis is necessary.
Any advice as to how progress this would be very gratefully received.
What we want is to finally be able to complete our mum's estate and get onto the next stage of the grieving process, this is just preventing us from doing so.
I'm sorry for your loss.
I'm not sure that there is anything that you can do without any form if contract that the sum is owed.
On the contrary. Don't be put off by the lack of contract. It's still an enforceable debt. The executors have a duty to realise the estate, and if that includes suing the debtor, so be it. You'll need to use a solicitor, but if successful will recover costs.
Thank you both for replying.
EarthWindFire - We believe that we have enough evidence to prove that the money was loaned to the other person, that it was a loan, otherwise why would payments have been made and the reference used on the payments into our mum's account was referenced by the debtor as loan repayment, her correspondence to us that she agrees there was a loan but that she won't make any further payments as she believes that is not what our mum would have wanted. I know that we don't have official paperwork like a bank would have but we can show money been paid out and repayments back in.
Collaborate - , we believed it was enforceable, if mum hadn't died then it is our belief that the debt would still be being paid at the agreed rate.
But, do we need to instruct solicitors in view of the amount involved? If the debt was below the small claims court limit I would have no hesitation in just issuing proceedings without solicitors. What is preventing me is the fact that the debt is above £10,00.
Does anyone have any experience of issuing County Court proceedings without solicitors or is just not the "done thing?"
Thank you all for your advice
Have a look on money claims on line. You wil be able to do it on there.
Whether your mum would have wanted the debt to be written off or not is irrelevant. Legally it's what's in the will that matters.
Can you write to her again pointing this out, and that should you need to take the matter to court it is possible (probably?) that the court would require full and immediate repayment, plus costs, whereas if she avoids this you would be happy for her to continue the repayments as is?
Alternatively can you write off £3k and ask for £10k in full and final settlement, then go to small claims if you want to avoid county court?
Titchy, hadn't thought of that. Will see what my sister thinks although I think we are under a duty to get as much repaid to the estate as possible, but I think we could balance that out with no solicitors costs.
EarthWindFire - I've not heard of Money Claims On line I'll have a look at it. Do you know if it has the same monetary limits as small claims court and county court?
EarthWindFire - Money Claims on line is for small claims court only - it appears to be the standard small claims procedure but on line so hopefully gives speedier results.
Thank you all for your suggestions - all greatly appreciated
You can certainly do it yourself. Many, many people bring claims themselves over the small claims limit. The procedure will involve a couple more stages than small claims, but the fundamental points remain the same.
The fees to pay to the court will also be higher, but provided you are successful, they should be added to the debt and repayable to the estate.
After the claim has been issued, you will need to fill out an 'allocation questionnaire' which allows the court to make some decisions about how the case should be handled. At this stage you can ask the court to allocate the case to the small claims track, even if it is over £10k, and the judge may agree to do that. This would have the effect that small claim rules would apply from that point onwards.
remember that the claimants will be you and sis 'the personal representatives of Mrs X, deceased'.
I am sorry for the loss of your mum.
we could balance that out with no solicitors costs
Remember that if you win the "friend" will have to pay your legal costs.
Traviata and prh47bridge - thank you so much for the advice and the confidence in knowing that other people do this themselves without solicitors.
That wasn't meant to be derogatory to any legal professionals reading this and I know using solicitors for dealing with a deceased's estate or reclaiming money owed is preferred by many people.
Thank you mumsnetters
EartheWindFire - please accept my apologies - money claims on line may be the way to go as it is a fixed claim under £100,000. Sorry, in my haste I initially didn't see the extra "0"
You are all fantastic at sharing advice, thank you for taking the time to read and respond
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