Debts after death

[TheSnootiestFox]

Hi, just after some help please! Long story short - my mum died recently leaving under £3k in her accounts but a very neglected house worth £145k. She also left debts of around £8k for unpaid credit card bills, care bills, water and telephone etc. Her cremation will be paid for out of the £3k leaving me £1000, and I need to pay the contractors that I instructed before she died and who have completed work on the house as i wasnt expecting her to pass away quite so quickly. There will be about £100 left. I have no intention of selling the house as I rent currently and intend to live there with my children. Credit rating shot due to previous mortgage going into arrears when ex h walked out so I can't remortage. My question is, can I be forced to sell up and pay the debts?

You should be able to find a loan secured against the house for £10k. Previously you couldn’t borrow but you didn’t have a house as collateral. Now you do. You might need a specialist to advise but most you don’t need to pay till you have your mortgage/ loan.

First point of call is definitely to speak to the CC companies to see if they will cancel/reduce the debts or even offer a payment plan (which you could pay using your savings in rent).
If nothing is possible there then even with awful credit I think you will find a way to get a loan/mortgage for the £8k.

You're all brilliant, thanks, I feel so much better now! I think I'll try a payment plan first, @GrumpyPanda as they may jot charge me interest. Thanks again all x

You've probably got a good chance of getting a loan now you have a house. If not it might be worth contacting her creditors to see if you can work out a repayment plan with them.

Speak to your solicitor & see what route they recommend.

One way or another the creditors will need to be paid

Some sensible advice here. Look on moneysavingexpert.com for lenders that you can do a soft application for a loan ti check eligibility/interest rates.
Can you improve your credit rating? Again advice on same website to do so.
London & County are a fee free mortgage advisor.
Make an appointment with your bank.
Negotiate with creditors.
Being a house owner sounds like it solves one problem but what about funding maintenance etc?
Yes, it's my experience that it's straightforward to have funds transferred especially if you were already a signatory on your mum's account.

If you're going to borrow against the house then you'll need ownership transferred into your own name first. To do that you'll need to apply for probate so that you can act as executor (assuming there is no will naming some else as executor).

@TheSnootiestFox Good luck let us know how you get on fingers crossed

@NotDavidTennant thank you. Yes, probate is my next job!

Could you give notice on your rented place and move straight into the house to save on rent?

The debts will be put on hold until you can obtain probate - currently there's long delays and it could take months. In that time you could save several months rent, which would make a dent in the debts when they become due after probate has been granted - which might make it easier for you to borrow to repay the rest of it?

What a great idea

I’m sure you will get some form of loan. You’ll be ok.

probate only took 12 weeks for my dad’s estate, and for my friend’s dad’s (1.5 years ago). If there’s no will it might be a little longer.

@TheSnootiestFox explore payment plans but be wary - they really will stop you getting credit.

Good luck and i'm sorry for your loss.

https://nationaldebtline.org/fact-sheet-library/debts-after-death-ew/#:~:text=If%20you%20have%20been%20left,outstanding%20debts%20from%20the%20estate.

This has some useful information about debts and who is responsible.

They’re not your debts but it’s also not your house.
You inherit what’s left of the estate once the money has paid the debts.

Unfortunately I've had quite a lot of experience of this recently and there actually was no estate to pay any of the debts. However, it was quite surprising how so many of the credit card companies accepted that and wrote off the debts quite quickly.
In the grand scale of things 8k is a relatively small amount. I wish you all the best , dealing with a death and resulting debts is pretty dire. Try not to let it affect how you feel about your mum, she was solvent when she died.

If there isn’t a will, then you can’t do probate - it’s administration and you are not legally the executor as you’ve not been named as such.

id give notice on the rental you are in and move into the home your mother had

save the rent money

inform all the creditors there is no will and you’re not the executor. I’d not set up a payment plan.

tell all the creditors that it’ll be administration and they’ll have to wait

by the time admin is done - you’ll have probably 12 months of saved rent? Would that cover the debts if needed?

@Ruralrules I came onto this thread as curious what happens if someone dies in debt. One of my parents likely will (council older people's housing, benefits, debts...) and wondered can we still do house clearance or would anyone check for valuables (she doesn't have any) and would any debt pass on. She really didn't think she'd end up like this 😔

Sorry for your loss

They are not your debts they are debts of your mums estate

But the house is an asset of your mums estate

Where assets are higher than debt, they need to be sold to pay the debt

The balance of the estate would then be distributed

Some excellent advice here. Talk to all the creditors. A death and frozen assets will buy you lots of time in terms of sympathy and a practical excuse. Mostly, people aren't monsters.
We had plenty of assets to clear a big gas bill which had built up when mum and dad died (faulty meter, dad with dementia - perfect storm which meant we had a bill of over 19k!!). Two years on and the bill is only just being settled.
Use that time to get advice. Good luck. x

When my dh died suddenly he had a car loan which was written off by hsbc, this was even though we owned our home outright without a mortgage . They did not expect me to sell the family home to repay the loan. no will either.
i had to fill out a form and that was quite simple

Credit card companies seem to pass these sort of debts over to a management company so we found we were often speaking to the same company about multiple debts. During the funeral period we were hounded by one company until I threatened to report them to the FSA, no idea if that's even a relevant threat but they certainly took notice.
One credit card company asked for the death certificate number before handling it over to a management company.
I'm guessing that the management companies check land registry for ownership of property as this was never queried. We just kept quoting that there was no estate. As a family we didn't feel good about the debts which ,as far as we know ,came to around 12k although it could be higher but they had given cards to a vulnerable person with very little income and a dreadful credit history.
The deceased lived in an almost mortgage free home with a partner but their name had been taken off the mortgage many years ago due to the debts.None of the companies we dealt with expressed any interest in the personal effects of the deceased.

Thank you all, some valuable information here. I can't move into.mums yet as it really isn't habitable and needs clearing. Also, UC pays most of my rent here so there's no real saving to be made. Thanks anyway though!

All the debts will need to be paid before ownership is transferred to you. I don't know the legally so check that it's ok to move into the property in the meantime, this could save your own accomodation costs and by the time probate goes through you might very well have saved up enough to pay off the amount.

Do you have any friends or family who could give you a bridging loan in case it's needed faster?

Sorry cross posted!

Sorry to hear about your loss @TheSnootiestFox. I've just dealt with my mam's estate following her passing, although she had little in the way of assets, bless her.

In our case mam had been paying into a pension pot. What I didn't realise was that a pension falls outside of the estate, so that money didn't have to go towards her debts.

I'm sure there are rules and caveats around that but maybe there would be some funds there that could help you?