Having to Pay the Debt of a Deceased Parent?

[absolutelyclueless]

Hello All,

I hope you can give me some advice for a good friend, whose father sadly died in August. The debt is for an adjustable bed that her Dad took credit out for back in 2013. My friend thinks the debt is about £6,000; she knows he was paying £103 a month and had 36 months to go when he became very ill and was moved into a hospice.

The deceased didn't own his own property, and money from his bank account was split between my friend and her 2 siblings (there was not enough in the account to to cover this debt, incidently).

My question is, is my friend liable for this debt? Her father was under the impression it would effectively die with him, but she has today received a letter saying she will hear from the company's solicitor within 10 days regarding the outstanding amount.

Any advice gratefully received; obviously this is adding to the upset of a recently bereaved family.

All the money in his account should have gone to pay the debt. The rest would then have been written off.

The company can pursue the executor for the debt because debts have to be dealt with before distributions.

Thanks, Fanny.

Yes, the executor will be personally liable. If the estate didn't leave enough to pay the debts there was nothing to distribute.

Thank you very much everybody for your responses - even if they weren't what wanted to hear! :(

No, it's not great news unfortunately! My DH has been an executor on a number of occasions, it's a load of stress and a thankless task. I do think a lot of people don't realise how much there is to it, and how responsible (legally) the executor is. I hope her siblings return the money so she can sort it out!

My father died leaving a credit card debt and no assets other than the house he owned jointly with my mum.
I wrote to the credit card company advising that he was deceased and the estate was insolvent so no money to pay the debt, and sent a copy of the death certificate. They did ring and asked a few questions but never asked for any proof of his bank balance or how the funeral was paid. They wrote the debt off and didn't suggest anyone else should pay it.
I'd advise your friend to write to them explaining the estate was insolvent and wait for their response.

I'd advise your friend to write to them explaining the estate was insolvent but it wasn't? There was money available to pay towards the debt.

Please don't advise your friend to tell them the estate was insolvent. It wasn't and lying is a really bad idea.
I had to provide bank statements etc to prove

The estate was insolvent. Insolvent doesn't mean there was no money, it means the money left was less than his debts.

If the benefactors didn't pay for any of the funeral costs then they should have paid the money towards his debt, yes. However, if the bed company have sent this letter assuming there is money in the estate to clear the debt then the first step should be to notify them that the estate is insolvent and wait for their response .

So - what happens if a parent has no contact with their children and then dies with debts? DH doesn't even know the name of his father, or if he's dead or alive. What if his DH dies with a load of debt?

I can see that where someone holds goods/property that that should pay off debt first, but how on earth could DH be made liable for the debts of someone he's never even met?

No one else is liable for the debt. Only the estate. Once funeral costs are covered there is a set order for other debts to be paid off. Once the money runs out the estate is then insolvent and the debts cannot be passed onto a family member

Treysanatomy the issue here is that there was money paid out to the OP's friend and others. At that point the estate had some funds to satisfy the debt. We don't know the figures it's possible it was enough to pay the debt in full. If that's the case ge estate was not insolvent and lying will get them into trouble if found out.
The money should be repaid to the estate to settle as much as the debt as possible. The people who received it was not entitled to do so.

Sorry just re read OP and can see debt was more than money in bank. Even so the money should have paid off as much as the debt as possible. The remainder would then be written off

No one is liable for the debts of a deceased person.

However executors ARE Responsible for satisfying said debts or as much as possible if the estate won't cover the lot, before distributing the remains of the estate.

So - what happens if a parent has no contact with their children and then dies with debts? DH doesn't even know the name of his father, or if he's dead or alive. What if his DH dies with a load of debt?. Nothing happens. The executor is responsible for sorting out the estate and paying off debts then finally any inheritance to be passed on.

• should have added. The nc children may or may not be beneficiaries.

The friend is responsible for the debt because she is the executor and it is the job of the executor to settle debts first. Unfortunately, if an executor does not follow the rules they can be held personally liable.

Kickass I can't see why you think your DH may be liable for his (presumably) DF's debts - no one has said that.

.

Sorry - I misread some of the earlier posts to mean that people had had to pay their father's debts. Then I re-read them and realized I was wrong

One thing to check might be whether the bed was on a loan or hire purchase.

If it is on hire purchase, it remains the property of the company until it is fully paid for. If the debt is unpaid, the company can respossess the bed, so giving it away might have been the wrong thing to do and they may expect reimbursement? Can the bed be returned if that's what the company wants? Eg if it was given to friend or family?

If it was being paid for using an unsecured loan, then the bed was the father's property from day 1, so giving it away is fine. The estate should have paid as much as the debt as possible, but then the debt would be written off.

If the bed was on HP, and therefore still legally belonged to the finance company, the executor shouldn't have given it away - it wasn't theirs to give. They should have given notice to the finance company to remove it within the 2 weeks. So, if they misappropriated the asset of the finance company, it is entirely possible they could be liable for the full value of the bed, not just the amount left in the bank account which they wrongly distributed. I'd say they need proper legal advice as it's not looking good.

I'd guess what people are saying about paying it from estate is probably correct but when my mil died she had just bought bedroom furniture on credit. My dh just rang them and said she had died and he knew nothing about it and he wasn't paying and it was tough and they were more than welcome to come and get the furniture. We have never heard from them again.
It's not the most honest way to do it but worth a try? They never asked for any proof or anything.

Apart from death certificate of course

smiley Not the most honest is an understatement - but the difference here is that you made the furniture available for collection so could defend any court action based on having given them a reasonable opportunity to limit their losses.

Given that OPs friend has already talked to the company and did know about the debt, was executor and gave the bed away, adding fraud to the mix would be a bad idea... although if it's possible to get the bed back, and it's in the same condition; that might be an option.

My dh just rang them and said she had died and he knew nothing about it. The fact that he rang them would have meant he did in fact know about it. Why did he say he wasn't paying? He wasn't expected to pay anyway? Unless as an executor of the will he was looking out for his own inheritance.