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Original poster

Insolvency administration order for deceased MIL

18 replies

Furryful · 02/03/2024 14:15

Hi,

MIL passed 4 weeks ago. It wasnt expected and we’re all reeling.

she hasn’t left an estate as the house she shared with FIL has passed to him under the rule of survivorship. They owned the house as joint tenants so it doesn’t form part of her estate. SIL is a solicitor and gas helped us understand all of this.

MIL had a 5k balance outstanding on a personal loan at the point of her death. The bank have been quite aggressive in their approach with FIL. FIL has given dh permission to speak to the bank on his behalf.

The bank have said that they could apply for an insolvency administration order to reclaim the debt. This would effectively force FIL to sell the house. This seems heavy handed for a 5k debt

SIL thinks that it’s unlikely that they would pursue that route as it wouldn’t be financially profitable for them after costs etc.

Does anyone else have experience of this?

OP posts:
PickledPurplePickle · 02/03/2024 14:47

How has FIL told the company the debt will be repaid?

TheFamiliar · 02/03/2024 14:48

Debts die with the debtor

TurkishDelight72 · 02/03/2024 14:53

Is the house part of her estate? - this is the key thing.

DF died with debts which exceeded his assets (no house) so all the debtors were told there was no money left to pay the debt.

We wrote a standard letter and sent it in response to every threatening letter we received, saying X died without any assets therefore this debt cannot be repaid from his estate. Eventually they all gave up.

TBOM · 02/03/2024 14:56

TheFamiliar · 02/03/2024 14:48

Debts die with the debtor

Unfortunately that’s not true. If there is money in the estate, debts are paid from that before the remaining estate is distributed.

@Furryful is there any money in the estate (excluding the house which isn’t part of the estate if they were joint tenants)

WhistPie · 02/03/2024 14:56

TurkishDelight72 · 02/03/2024 14:53

Is the house part of her estate? - this is the key thing.

DF died with debts which exceeded his assets (no house) so all the debtors were told there was no money left to pay the debt.

We wrote a standard letter and sent it in response to every threatening letter we received, saying X died without any assets therefore this debt cannot be repaid from his estate. Eventually they all gave up.

Have you actually read the OP?

MsAdoraBelleDearheartVonLipwig · 02/03/2024 15:01

Surely the house is now your Fils as it passed to him by law, it wasn’t left to him as part of an estate? Or is that not how it works?

beetr00 · 02/03/2024 15:07

@Furryful https://nationaldebtline.org/fact-sheet-library/debts-after-death-ew/

"If the debts are in joint names or had a guarantor, the surviving person or guarantor will become solely liable for them"

TurkishDelight72 · 02/03/2024 15:16

@WhistPie Yes I did read the OP, thanks, but wanted to double check.

If the house definitely isn't part of the estate then obviously the debt can't be repaid from it.

It is confusing to me that OP had proper legal advice explaining that the house is definitely not part of the estate but that same legal advice didn't extend to explaining that one person has no obligation to pay off another person's debt.

FriendlyNeighbourhoodAccountant · 02/03/2024 15:27

TurkishDelight72 · 02/03/2024 15:16

@WhistPie Yes I did read the OP, thanks, but wanted to double check.

If the house definitely isn't part of the estate then obviously the debt can't be repaid from it.

It is confusing to me that OP had proper legal advice explaining that the house is definitely not part of the estate but that same legal advice didn't extend to explaining that one person has no obligation to pay off another person's debt.

I don't believe this is correct.

When a property is owned as joint tenants it passes outside the estate to the other owner, hence the estate being insolvent, but this isn't the same as the deceased having no assets.

The point of the insolvency administration order is that the creditor can ask the court to order the repayment of the debt from the interest the deceased held in the property. They are used very specifically because of assets such as property held as joint tenants.

Original poster
Furryful · 02/03/2024 15:41

PickledPurplePickle · 02/03/2024 14:47

How has FIL told the company the debt will be repaid?

No, we have simply explained that there are no assets to settle the debt

OP posts:
Original poster
Furryful · 02/03/2024 15:42

MsAdoraBelleDearheartVonLipwig · 02/03/2024 15:01

Surely the house is now your Fils as it passed to him by law, it wasn’t left to him as part of an estate? Or is that not how it works?

Hi, yes that’s right, the house became his at the point of MIL’s death and does not form Part of her estate

OP posts:
Soreteatowel · 02/03/2024 15:46

Did the bank have a charge on the house? If not and there were no other assets, the bank know they can't persue it, although it's right that they check. Get SIL (as a solicitor) to write a letter to that effect.

MsAdoraBelleDearheartVonLipwig · 02/03/2024 16:03

They can’t persue it then and they’re being bloody cheeky to ask.

Original poster
Furryful · 02/03/2024 16:06

FriendlyNeighbourhoodAccountant · 02/03/2024 15:27

I don't believe this is correct.

When a property is owned as joint tenants it passes outside the estate to the other owner, hence the estate being insolvent, but this isn't the same as the deceased having no assets.

The point of the insolvency administration order is that the creditor can ask the court to order the repayment of the debt from the interest the deceased held in the property. They are used very specifically because of assets such as property held as joint tenants.

Show quote history

Yes that’s what they’ve said. We aren’t disputing their right to instigate the order, but it just seems odd given the size of the debt

OP posts:
FriendlyNeighbourhoodAccountant · 02/03/2024 16:08

Furryful · 02/03/2024 16:06

Yes that’s what they’ve said. We aren’t disputing their right to instigate the order, but it just seems odd given the size of the debt

Show quote history

I agree it seems an expensive option for a small debt but perhaps it doesn't bother them.

Flatleak · 02/03/2024 16:36

A share of a property owned as tenants in common does pass directly yes but as part of the estate. Debts have to be paid from it - you can find this through google searching.

I assume SiL isn't in property law so you need to seek proper advice

Original poster
Furryful · 02/03/2024 16:38

Flatleak · 02/03/2024 16:36

A share of a property owned as tenants in common does pass directly yes but as part of the estate. Debts have to be paid from it - you can find this through google searching.

I assume SiL isn't in property law so you need to seek proper advice

Hi, they were joint tenants, not tenants in common. The house became solely the property of FIL when MIL passed away

OP posts:
Flatleak · 02/03/2024 16:40

Oh man sorry @Furryful, the issue with responding on the app means you can check the OP before you say something stupid 😂

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