Advice needed ASAP

[Newoneonherr]

Hello.

My DF is currently in critical care, he's elderly and the prognosis isn't good.

He dealt with all the family finances. My DM has just disclosed that he still has a large personal loan in his name.

It's about 15k, for renovations to their house.

My DM is not on the mortgage and never has been, the house is in my DF name. They have no other loans as far as she knows and the mortgage has four months left until it is cleared.

There isn't a will or even any life insurance.

My DM doesn't have 15k to settle the loan, she barely has enough to cover the mortgage payments.

I told her it would be fine and she shouldn't worry. What happens to the loan if my DF passes?

Will mum have to pay? Will she lose the house?

Sorry, I know nothing about this.

Please anybody?

Anyone?

First of all, I’m sorry to hear your Dad is gravely Ill.

If they are married, then yes she will have to take responsibility for the debt. It won’t be ‘her’ debt but will have to be paid out of his estate - which could mean the house, if he has nothing else in savings.

Have they spent the money of the loan? If not then pay back what you can and arrange a payment plan ?

Does your dad have any plans in place for his funeral costs etc? A pension ? They often pay out not long after death so you may well be covered.

But remember. Try not to stress, money moves slowly. Stress is not useful. There is always a solution.

Sorry I was being interrupted when I wrote that.

Basically - focus on paying off the mortgage.
Then tackle the loan repayments. See if it becomes void after death, although it’s unlikely.
Check for pension plan paperwork, life insurance etc. That will help

The loan will have to be paid, this is the problem when wives are not allowed near the finances. I think she needs to visit a lawyer to help her sought things out. You need to help her find out what accounts he has, his pension, if any etc she will need all this to help the lawyer administer the estate.

Yes she takes the debt, but she can possibly negotiate lower payments over a longer period. How old is she?

Also does he have a private pension that she would be entitled to a share of?

Op, another thought, could she release equity in the house? To pay it off, worst case?

OP I'm sorry you are going through this
When my DF died he left a lot of debts and no liquid cash, I called the companies and said he'd passed and there were no funds to pay the debts and they wrote them off.
Maybe it wasn't the moral thi G to do but it took a huge weight of my DM plate and she didn't have to worry about the debts.
He had 1 unsecured loan and about 3 credit cards, if your DF loan is secured you will struggle to get rid of it so easily. I'd call them and set up a repayment plan to save them placing charges to property.

Please don't send her to a solicitor until you've checked all you can yourself. Their fees will quickly mount up.

When you feel up to dealing with it, contact the lender and advise them of the situation. They can put a hold on payments until you're able to make arrangements to pay.

Gather together all the paperwork and put the information on a spreadsheet, assets and liabilities, account numbers and contact details.

If there's not enough cash in the estate to settle the loan, then you'll need to look at borrowing against the home (assuming your mum wants to stay there). However if the amount is only a little short it's worth speaking to the lender to see if they'll accept a settlement.

All banks, insurance companies etc have bereavement teams. They'll be able to help and they'll have more time than normal customer service staff to help you sort things.

Also, whilst it does need to be paid, the loan is the responsibility of your father's estate, it is not your mum's responsibility. Some lenders may push for her to settle it personally, any suggestion of that and you should complain to the FOS.

I'm sure you're not considering it, but it is a criminal offence for the executor to lie about the contents of the estate. That is terrible advice.

Someone has to obtain letters of administration to be recognised as executor. You cannot just start meddling with the assets, liabilities. You cannot sell the house,if necessary without this or access bank accounts, deal with Pensions etc.

I would get advice from a lawyer then once you understand what is needed you may be happy to take on the legal duties.

Do they have joint bank accounts? Your dads bank accounts will be frozen when he dies until probate is sorted out.

Sorry to hear about df. Are they married? If so absence of will means his assets pass to her regardless of whose name the house is in. If there is any other assets ie. Car, investment or savings could those be used to make the payments. What is their source if income, any pension, is there any life policy against the mortgage? Worst comes to worst sell house, clear debts and buy somewhere smaller/cheaper.

Is the house held as tenants in common or jointly? If joint, it doesn’t form a part in f the estate. Does the estate (ie the rest of your dad’s assets) have enough to cover the debt?
If not - I am not sure whether your mum does remain responsible- if the estate is insolvent, the beneficiaries/ executor aren’t personally responsible