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Original poster

Deceased with debt - spouse responsibility?

30 replies

Patters86 · 03/12/2023 21:55

Hi,

sadly my mother passed away and it transpires she has a lot of debt.
She lived in a mortgage free house jointly owned with my dad (they are married).
She has her own bank account with a large overdraft which is maxed out.
There is a joint account with a smaller overdraft which is maxed out.
There are also some credit cards (unknown at present what the total debt on these is).
She had a funeral insurance plan but no other life insurances or anything.
She has no cars or valuable assets that can be sold.

so the question is how does my dad go about sorting this and what debt is liable to be paid? The only way he could access any funds would be to sell the house which obviously he doesn’t want to do given it’s his home.

This is all very stressful at a time when we could do without it.

Thank you

OP posts:
mrsbyers · 03/12/2023 21:59

He will only become responsible for joint debt so in this case the overdraft on joint account , anything in sole names is paid from estate if anything left after funeral and admin expenses are settled

fitforflight · 03/12/2023 21:59

I would wait for one of the well respected solicitors on here to help, but if I had to "guess" I would say the following:

Your dad isn't liable for the debts, providing they were solely your mum's, the estate would be liable if it has the funds. How was the house owned? If it was owned as joint tenants I believe it falls outside of the estate and passes directly to the other joint tenant. If it was tenants in common then your mum owned a specific % in which case the estate would have the means to pay the debts, by sale, mortgage etc.

theduchessofspork · 03/12/2023 22:01

He’s not going to have to sell the house, don’t worry.

He should talk to CAB in the morning.

fitforflight · 03/12/2023 22:01

I missed the joint account overdraft, your dad would be liable for that.

Britinme · 03/12/2023 22:02

Unless the law has changed in the last 22 years, when my first husband died, he had a small credit card debt which I had to pay.

If they are joint tenants on the house, it is now your DF's and does not form part of DM's estate.

HappyintheHills · 03/12/2023 22:02

If they are personal debts then they die with her.
I had a bank try to chase me for late husband’s debts but he had nothing left in personal accounts after funeral costs and I had no liability.

Britinme · 03/12/2023 22:04

Now I've read @HappyintheHills post I must add that my first DH did have funds in his personal account which may be why I had to pay off the credit card debt.

Original poster
Patters86 · 03/12/2023 22:05

Thank you everyone. Feel better already from these responses.
im not sure how they owned the house in terms of tenants in common or joint tenants. They bought the house about 40 years ago so I doubt my dad would know but assuming this would be on the deeds?
there will be no money left once her funeral is paid for so defo no money to be able to hand over.

OP posts:
Blinkityblonk · 03/12/2023 22:07

Just let each of the companies know there's no money left over and send the death certificate copy, if small amounts up to a couple if thousand and no prospect of recovery, they will just close the matter. Hopefully no joint debts.

Collaborate · 03/12/2023 23:20

Doesn’t matter how the house was held (joint tenants or tenants in common) - whatever interest she held in the property forms part of her estate and is available to pay her creditors.

Alphabet1spaghetti2 · 03/12/2023 23:35

@Collaborate the national debt line linky I posted states otherwise. It does depend on how the house was held.

Britinme · 03/12/2023 23:42

I was advised by a lawyer that a jointly owned property I hold with my DSD would be hers when I die and not form part of my estate. I am in the USA so I don't know if UK laws are different.

Collaborate · 03/12/2023 23:56

It’s section 421A of the Insolvency Act 1986. The creditor can apply to the court within 5 years for an order that the property be made available for creditors. Unless the circumstances are exceptional an order should be made.

Alphabet1spaghetti2 · 04/12/2023 00:36

It is exceedingly rare for that to happen according to this. Plus a lot of other criteria would need to be met, which may very well not apply in this case, depending on amount of debt and how the house was owned between them.

the national debt line is best placed to offer advice for free and allay any concerns.

Deceased with debt - spouse responsibility?
caringcarer · 04/12/2023 00:43

mrsbyers · 03/12/2023 21:59

He will only become responsible for joint debt so in this case the overdraft on joint account , anything in sole names is paid from estate if anything left after funeral and admin expenses are settled

But her estate would be her half of the house. So in this case her husband will either need to pay the debt off himself, get a loan to repay the debt or remortgage the house to repay the debt.

caringcarer · 04/12/2023 00:45

HappyintheHills · 03/12/2023 22:02

If they are personal debts then they die with her.
I had a bank try to chase me for late husband’s debts but he had nothing left in personal accounts after funeral costs and I had no liability.

Did he own half of a house though?

HappyintheHills · 04/12/2023 07:53

@caringcarer - we owned our property as joint tenants therefore there’s no half of other percentage, the moment he died all property became mine and did not form part of his estate.

HappyintheHills · 04/12/2023 08:23

Collaborate · 03/12/2023 23:20

Doesn’t matter how the house was held (joint tenants or tenants in common) - whatever interest she held in the property forms part of her estate and is available to pay her creditors.

You are wrong.
The right of survivorship means that on the death of one co-owner, that co-owner's interest in the property will pass automatically to the surviving co-owner(s) by law.

HappyintheHills · 04/12/2023 08:30

HappyintheHills · 04/12/2023 08:23

You are wrong.
The right of survivorship means that on the death of one co-owner, that co-owner's interest in the property will pass automatically to the surviving co-owner(s) by law.

Show quote history

To be clear that’s for joint tenants

iamthecakefairy · 04/12/2023 08:34

It isn’t quite right that personal debts die with the debtor.
If there are assets in the estate the debts should be paid. If there are no assets, or not enough assets, you may need to apply for an Insolvency Administration Order.
You need to take some proper advice, if there is a solicitor dealing with the estate they will be best placed to help.

AnnaMagnani · 04/12/2023 08:35

He's only liable for joint debt eg the joint bank account.

My DF spent his final year desperately trying to pay of his credit cards, DM was an additional card holder, so that she wouldn't be in debt.

When he died the card companies wrote all the debt off immediately, if only he had known. There was no estate as the house was owned jointly and they couldn't touch it.

The card companies told us it happens all the time.

GOODCAT · 04/12/2023 08:36

@Collaborate is right the rules changed

Collaborate · 04/12/2023 09:02

If the assets of the estate (not counting any property held under a joint tenancy) are less than the debts then the estate is insolvent.

If the only asset that requires a grant of probate to administer is the joint tenancy property then it may be that no beneficiary will want to apply for probate. However an interested creditor can apply for probate, and whether they do so will depend on what policy that creditor has for such a situation - I'd imagine it will depend on the amount of the debt.

If the personal representatives under the will or intestacy have already obtained probate then it is simpler for the creditor.

A creditor will, after probate is granted, need to apply for an Insolvency Administration Order. It is likely to be granted, and has the effect of severing the joint tenancy immediately prior to death, making the the deceased's interest in the property available to meet the debt due to creditors. As the creditors have 5 years from date of death to apply for an IAO it would be wise for any surviving joint tenant to bear this in mind,

AnnaMagnani · 04/12/2023 09:06

Nobody wanted us to apply for probate and I have to say every bank and card company I spoke to couldn't have been more helpful or sympathetic.

It made a difficult time a lot easier.

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