Insolvent Estate – How can they be dealt with? Sometimes an insolvent estate will arise to be administered, but how do you deal with it? Laura Richardson explains all in her latest article . . .
In some cases, there is not enough value in an Estate to settle all of the outstanding debts accrued by
the deceased. However, certain debts can be claimed from another person if the debts were held
jointly, or if they were subject to a Guarantor.
Guarantor
A Guarantor is someone who has legally agreed to pay a certain debt in the event that the debtor cannot. Therefore following the death of the debtor, a Guarantor is legally obligated to settle any
arrears, as well as continue to make payments towards the debt.
Jointly owned property with the deceased
The way in which the property was held by the joint owners will determine whether creditors can
claim debts against the property. It is best to consult with a specialist to determine whether a joint
owner of the property could be liable for any debts accrued by the deceased.
If there is a joint mortgage balance outstanding on the deceased’s property then the remaining
mortgagee is liable for continuing mortgage payments as well as any arrears. In order to transfer the
mortgage into their sole name, the remaining mortgagee would need to follow a mortgage
application process. If the mortgage company determines that the applicant cannot afford to take
over the mortgage then they can force the sale of the property.
If you inherit a property that has an outstanding mortgage then the Lender will expect mortgage
payments to be made until such time as you can apply for a mortgage in your own name over the
property. If you are unable to take out a mortgage over the property then you may be forced to sell
the property in order to pay off the outstanding mortgage balance.
Utility and Council tax bills
Generally speaking, any adult occupier of the property will be liable for any outstanding bills
regardless of whether they were named on the bills.
Overdraft
If the deceased held a joint bank account which is utilising an overdraft facility then the joint account
holder is liable for repaying the overdraft amount.
The law surrounding insolvent Estates can be complicated, therefore if you would like any further
information regarding an insolvent Estate, contact Andrew Douglas Wills and Legal Services today.
Whether you are in Chelmsford or the surrounding areas of Essex, we offer a free initial consultation
to discuss your case.
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