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?

Could you call the people she owes money to and arrange payment plans so that you pay the 8k back in installments, and request the debt be transferred to your name?

Otherwise, could you take out a personal loan for the 8k?

Definitely look into taking a small mortgage, go to a mortgage broker and explore your options

Sorry you are in this position, and sorry for the loss of your mother OP.

Inheriting a house may stop your UC... if it's not going to be your main home, then you'll find that your benefits will be reduced/stopped completely.

Fingers crossed that you find a way through to keeping the house x

It will take a while to sort, if you can live in your mum’s house now, will u be able to save the rent you currently pay plus deposit towards the £8K - no legal experience but if possible it would be worth it.

sorry just seen been suggested

Speak to the people your mum owed money to and see if they will agree to a payment plan. If you can afford £8k over a year or two from the rent you’d be saving they may accept monthly payments to settle the debts over time.

@TheSnootiestFox CAN you go to the bank, now that there is an asset, and perhaps borrow 10k using the house as collateral?

Reduced but not stopped. I had this before when I lived in a mortgaged house and my husband left. It's just a different allowance. If I sell up, then UC will stop and I'll have to use the inheritance to live off, which is fine but of course I'll never own my own home which is the security I need for the kids.

OP@TheSnootiestFox if she had no will then you are not her executor and can't apply for probate - you have to apply to become the administrator and apply for letters of administration. if you write separately to all her utility services/c.cards etc and just let them know the state of play ie. that she died without a will and no cash assets remaining, you may buy yourself a lot of time as this process is going to take a while ...gives you time to think and plan your next steps! there is also the "Tell It Once" service if you are in england/wales "Tell Us Once .In most areas of England and Wales, the Tell Us Once Service allows you to report a death to several government departments, agencies and the local authority in one contact. For example, Tell us Once will help you to report the death to most of the offices that were paying benefits to the person who died, as well as to other government agencies such as the Passport Service and the DVLA. You must register the death first.
You can contact Tell Us Once either face-to-face through the local authority via a freephone number operated by the Department for Work and Pensions (DWP), or online via the GOV.UK website. The Registrar will give you contact details when you register the death, including a reference number to use online.
You can find out more about Tell Us Once and where it operates on the GOV.UK website at www.gov.uk.
If the Tell Us Once service does not operate in your area, you will need to contact all the relevant organisations individually."

Just to add to what @Kerfuffleplunk said, Tell Us Once was handy but you can use it without registering the death. We still don't have a death certificate because of some goings on with the coroner but I was able to get a reference number from the local registrar and use that to access the Tell Us Once service.

Also, I've found companies to be quite compassionate, although they do send out reminders. When I've spoken to them I've been told if not paid the debt is passed onto a specialist recovery company. Three months down the line I'm still waiting for this to happen for the majority of bills, so you will have some time to figure something out.

Your UC will only change when the house becomes yours. Until probate is completed and then house transferred it is not yours and should not be declared.

When all this is completed, if you move into the house your UC will only reduce by the amount of housing allowance you were receiving.

If you decide to stay in rented (bonkers imo) you will lose all UC as you will have capital in excess of 16k.

But mum and dad died last year. Probate applied in April and granted in January this year. So in the meantime speak to the creditors and tell them the truth. There is no cash in the estate. There is no will. Probate can't even be applied for because there is no executor (can't have an executor without a will) and you need to apply to be the administrator first.

These are NOT your debts, remember that. They will probably ask for a death certificate and right them off. However if they don't and you agree a payment plan - then this WONT show on your credit record as you have not signed the consumer credit agreement.

@TheSnootiestFox push come to shove, would you be able to get a large loan from anywhere so you can buy the house then you will get the money back to pay off the loan/ you can buy it at a reduced price. say 10k off or something

Thank you, that's really useful x I agree re it would be bonkers to stay renting when I have inherited a house. I'll see what the creditors say....

I don't understand 😕 I can't sell the house until its transferred to me anyway and why would I take out a large loan to buy a house I own 90 something percent of?

@TheSnootiestFoxI don't understand 😕 I can't sell the house until its transferred to me anyway and why would I take out a large loan to buy a house I own 90 something percent of? the solicitor dealing with the estate sells the house to you. you are the only beneficiary. it is all done on paper. you buy the house, estate is settled then you pay the mortgage off with estate money. that also increases your credit rating/ then you only have a mortgage of 8k because debts will be paid off by estate.

Aah I see, thank you. There is no solicitor dealing with the estate and I'd rather put the money needed to pay one towards the debt tbh. Also, paying my last mortgage off didn't increase my credit rating. I've had bank managers apologise to me when declining me products because they could see it was all paid off but my rating was still shot!

Don't sell it!
Get a tiny mortgage against the house, or even a loan, pay the debts, and use rent you're currently paying to service the mortgage.

Thank you x but, again, I can't borrow any money and my rent is mostly paid for me so no saving to be made ☹️

Do UC know about the house? This could be a problem for you as you are inheriting a house and UC benefit are paying your rent.....

I don't have to inform them until its mine. Then, of course, I'll be expected to live in it or live off the proceeds of any sale.

I'd be very careful and check UC rules on inheritance and when you need to inform them. Presently the house may be considered to be in administration. It also may be different rules if you receive council tax relief, they have different rules about inheritance to DWP

Can you actually afford to live in the house and pay all the ongoing bills?

"Premises intended to be occupied 1 UC Regs, reg 48(2) H2111
Premises that a person intends to occupy as their home shall be disregarded in calculating that person’s capital where the person

1. has acquired the premises within the last 6 months but has not yet taken up occupation or
2. is taking steps to obtain possession and they began those steps within the past 6 months or
3. is carrying out essential repairs or alterations in order to make the premises fit for occupation and these have been commenced within the last 6 months

UC Regs, Sch 10, para 4(1) H2112
A person is taken to have commenced steps to obtain possession of premises as in H2111 2. above, on the date that legal advice is first sought or proceedings are commenced, whichever is the earlier.

assets.publishing.service.gov.uk/media/654111fb1f1a60000d360b54/admh2.pdf

I forgot to tag you in my post above. The OP needs to inform them but there's a grace period of at least 6 months. The guidance allows for longer if repairs take over 6 months.

I think you said before that your mum didn't leave a will?
This means in law that she was intestate
You say you are only child so in that case the only beneficiary?
I am currently dealing with similar situation except with two siblings.
The property doesn't belong to you in law until after the probate has been granted and then the property title can be transferred into your name.
In my situation we are currently waiting for the property sale to complete.
There would be nothing to stop me living in the property if I wanted to.
But it is not in my name- I am assuming you have done all the paperwork for registration of death which informs council tax etc - also you would have to change utilities in to your name etc. Not sure you can do that before you get the letter of adminstration. If you decide to sell as we are then you are responsible for the properties up keep while it on sale but all bills will be taken out of the estate at the end.