What will the consequesnces

[owler81]

Hi Everyone,

So, hear me out....
Mum passed away 4 months ago. She was 82 and in very poor health for the last 5 years of her life. 3 years ago she took out 2 credit cards and got into a mess. We didn't know about this until a while afterwards. She struggled and the card providers ( one in particular) was quite aggressive in their approach. Disgusting really.

we are in the process of sorting her estate. The sale of her flat will generate some money and this has been split across me and my 2 siblings. The expectation is that the two credit card debts will be settled from this - the amounts are £2700 and £3100.

What would happen if we just ignored them and refuse to pay? We feel like we want to take a stand. Please be assured that this is not an attempt at increasing our inheritance - we have already agreed that we would donate the money to Macmillan.

I know that in theory we should settle the debts, but what would happen with relatively small debts, such as these if we just ignore them?

Should the lenders continue to pursue the debt, then I think going down that route would still be open to you.

Who's the executor(s) of your late DM's estate?

It's me and my two siblings

I’m (genuinely) curious as to why you think she shouldn’t have had the cards and why you think it was unsustainable. Clearly the debt is less than her estate, but how did it compare to her income and any liquid assets?

Shocking charity. Scrapping all benefits advice services locally for people living with cancer whilst, as you say recruiting more managers.

Sorry I don’t believe a word of the whole “irresponsible lending” and “of course we intend to give it to charity” rubbish. This is about you and your siblings not wanting to give up the money.

She was living on a pension and a little pension credit. The initial credit limit was £500 on one of the cards, but they increased that regularly. At it's worst, the minimum payments were over £200 per month which was making mum short for everything else.

Well you are entitled to your opinion, however that isn't the case and tbh your point of view is completely irrelevant to me.

That does sound irresponsible for someone on Pension credit. was she also claiming Attendance allowance if her health was poor, maybe they took that into account too?

No, she was unbelievable turned down for AA. We were in the process of reapplying for this.

The lenders would have asked your mum if she had any assets before they gave her the credit cards.
Your mum owning the flat would have been a huge ✅ in terms of them one day getting recompensed.

I am sorry that you feel she was bullied by these companies. Her having assets would have been the reason she was approved for credit cards given her age and her income.

You can still refer a complaint to the FOS even though your mum has passed. You’ll need to show you’re the legal representative of the estate, or that you have their consent to do so. The customer call hub at FOS will be able to tell you what’s needed but if you have Grant of Probate that will usually do. Please be aware that there are time limits for bringing complaints so if you feel that the credit card and/or the increases were unaffordable and unsustainable then complain now.

As for your original questions, you can be held personally liable, even years later. Even if you don’t pay a debt you didn’t know about - as executor you must make every effort to satisfy yourselves that the debts of the estate have been discharged.

it’s very easy to find out if someone owned property. Anyone can pay a few ££ and get information from the land registry to check ownership. as you’ve told the lenders your mum has passed they might have checked to see what the position is regarding the debt.

In this case, your mum will likely have answered questions about her circumstances when she applied. Standard questions are around income and housing situation. She’ll have declared she’s a homeowner. I’m assuming the mortgage has been repaid (if not, the lender will have seen it on the credit check). And it goes from there.

Thr right thing to do here is to pay off the debt and put in a complaint if you’re concerned about the lending.

In response to your question about how will they know what money is in the estate: they are entitled to know and if they sue the estate to recover the debts and you’ve distributed the assets without paying the debts, you’ll be personally liable. In addition to the sum owed plus interest, you’ll also be liable for the legal costs the lender has to incur in suing the estate. If you’re ok with that then take your chances.

I did probate for a relative and then put an advert in the https://www.thegazette.co.uk/. So anyone he owed money had until a certain date - I think it was 4 or 6 weeks to claim that there was a debt. It meant after that date I could distribute the estate knowing no one had stepped forward saying he owed money and I think after that time it’s too late?

How will anyone know what money was in an estate?

by checking probate records on he total amount is listed in probate, they can order a copy

I can understand your way of thinking as a grieving daughter but as an executor you have clear legal obligations. Letting your anger get in the way of completing your role as executor isn't worth it and could lead to more stress.

@owler81. I’m sorry to hear that your mum has died. It feels to me as though you might be moving some of your feelings about her passing onto this credit card stuff. It’s entirely reasonable. But it is displacement.

Your Mum made her decisions and now her estate needs to pay for them. Make sure interest is frozen and pay it off. And spend some of your inheritance on therapy. I did and it’s served me well in the long run.

It is worrying that you don't know your responsibilities as an executor, or your siblings don't, if it's them. Her debt is now a liability on the estate and has to be settled.

As someone else said, if she was so frail and vulnerable why wasn't someone helping her with managing her money? You didn't answer the question, by the way. The credit card companies don't hand out credit to anyone they feel like, there are laws that stipulate this (look up 'credit cards and the Financial Conduct Authority'). It's also not in their interests to hand out credit to anyone who has no hope of paying the money back. And the credit card companies won't let the debt go - it is common in situations like this for them to give you all some time to
grieve and sort out probate etc, but they will eventually be pursuing that debt.

We will be making a donation regardless of what happens with these cards.

That comment intrigues me - what does the £5.8k debt have anything to do with your charitable donation to Macmillan? Surely you'd donate anyway from your inheritance money or another source as the charity is so meaningful for you and your siblings?

Is not paying £5.8k really worth the risk of criminal records for you or/and your siblings?

Yes I think you should repay. She’s spent that money and morally it’s right it is repaid. Even if she was vulnerable she’s bought something with that money.

legally all debtors should be paid from the estate - whether or not this would be enforced no one can know.

Mum was incredibly well supported by me and my siblings, however she was also a proud and independent woman who was not really one to talk about finances. I think it' unfair and unpleasant to suggest that we didn't support her.

With regards to the credit card companies - take a look at the thousands of irresponsible lending claims that are uphelp by the FOS each year. Don't assume that their checks and balances were proportionate.

Yes, we will be making a donation to Macmillan, however this is not relevant to my post. If we were to find a way to not pay the credit cards then this would be a further 5.8K donation.

How is not paying lawful debts “taking a stand”?

YABVU. Your mother was given this money by the credit card people. Now she has died and her estate has the means to repay the money. The executor must repay all debts before anything left can be distributed. You might be angry that your Mum was given credit but that it not the point. Maybe you are really angry that neither you or your siblings realised your Mum took out credit cards in the first place but as an adult she didn't need your permission to do so. You are believed and upset about the death of your Mum and maybe just pushing this grief on to the credit card people. Just pay the debt off and focus on getting yourself grief counselling.

You’ve asked for opinions and largely people think you’re wrong. If this ends up costing you a lot more in the end then so be it.

I hear you OP I really do. But I think you need to find a different way to deal with your anger ,otherwise it will just hang over you. I promise you ,withholding the payment wont feel as good as you think it will.

Perhaps try reframing it in your mind? Paying them the money back is a step towards putting it behind you and helping you get on with the more important business of grieving for your Mum? Also remember it’s not her money ..it’s theirs that she borrowed and the interest is the price she paid for that . Im not saying its right or honourable, Im just saying you may feel less angry if you dont think of it all as her money, if you see what I mean.

I'm sure you were very supportive. Few people would know how to be an executor until the first time they have to do it.
The best advice given is to follow the card companies' complaints procedures to try to get the debts reduced or written off. If that's not successful they'll have to be paid out of the estate

https://www.financial-ombudsman.org.uk/businesses/complaints-deal/consumer-credit/unaffordable-lending

Looks like you may have to evidence that she was vulnerable when she applied for the credit. Maybe going through the FOS complaints process is the healthier way to make a stand, in the long run. But the odds aren’t in your favour as only 34% of complaints were upheld in favour of the consumer in the last financial year.

I would keep that money aside for now - depending on the outcome of the FOS complaint - thinking of the potential stress of a court case, legal fees and court costs to pay because the credit card companies will be coming after their money.