Cant pay off inherited car loan

icebergiceberg

My sister Susan got a personal loan from bank and she bought a car. There was no insurance on the car ie in the event of death the loan continued. Susan, left the car to my son John in her will. The loan is about twice the value of the car and has 3 more years to run. John is 19, a student who can not afford it. There is no money or property at all in Susan's estate to pay off this loan. There is nothing.

Who owns the car now?
Who is responsible for paying off the loan?
Can the executor or Susan's siblings be forced to pay off this loan?
Does the bank suffer the loss and write off the balance?
Can the bank be informed where the car can be collected and keys and papers handed over?

Many thanks in advance.

hullaballoo

Is there a particular reason you have phrased this as an exam or essay question?

icebergiceberg

hullaballoo wrote: »

Is there a particular reason you have phrased this as an exam or essay question?

Thanks for your response.

I wish it was such an academic point but sadly it is not. It is a stressful time when a sibling passes away what with dealing with all issues like the above. Issues you thought would never spring forth.

But the above is a real issue and am trying to set the situation out as clearly and as objectively as possible. And I suppose that is why my post reads like an exam question.

It is an emotional minefield and I am looking for opinions of people who had a similiar experience.

Forgot to mention I am not the executor of the will, just a sibling. I feel a moral obligation to pay off her loan, but why should I?

Thank you.

MarkR

If the loan was secured on the car, give them the keys to the car. If it was hire purchase, then I think you have to have paid a minimum of 50% of the repayments, then it can be terminated by returning the vehicle? Any documentation on the loan?

hullaballoo

Thanks, I can understand that. The reason I ask is that we often have people looking for us to do their homework for them. It's just an interesting way of phrasing a real life situation.

On the other hand, we do not allow legal advice to be sought or given on the forum as per the forum charter, so please bear that in mind.

icebergiceberg

hullaballoo wrote: »

Thanks, I can understand that. The reason I ask is that we often have people looking for us to do their homework for them. It's just an interesting way of phrasing a real life situation.

On the other hand, we do not allow legal advice to be sought or given on the forum as per the forum charter, so please bear that in mind.

Thank you.

I understand both of your points.

The reason why I would feel a moral oblgation is that I would be known in the bank. The bank may be thinking 'he can easily pay off the loan'. But it is not my loan.

MouseTail

Who owns the car now? Susan's Estate
Who is responsible for paying off the loan? Susan's Estate
Can the executor or Susan's siblings be forced to pay off this loan? The loan should be repaid from the Estate by the Executor if the funds are there. The siblings have no liability
Does the bank suffer the loss and write off the balance? If the funds are not there, yes.
Can the bank be informed where the car can be collected and keys and papers handed over? Yes

Beano

Surely the loan should come out of the deceased's estate?

cml387

This sounds like an unsecured loan.
In which case the bank have no particular claim on the car, but the car is part of the estate.

MouseTail

cml387 wrote: »

This sounds like an unsecured loan.
In which case the bank have no particular claim on the car, but the car is part of the estate.

So John has no right to the car, the asset must be sold to pay or part pay debtors before anything is distributed?

coylemj

Unless the loan was secured on the car, it goes to John as a bequest and the residuary legatee is effectively left to pay the outstanding balance of the loan.

icebergiceberg

MouseTail wrote: »

Who owns the car now? Susan's Estate
Who is responsible for paying off the loan? Susan's Estate
Can the executor or Susan's siblings be forced to pay off this loan? The loan should be repaid from the Estate by the Executor if the funds are there. The siblings have no liability
Does the bank suffer the loss and write off the balance? If the funds are not there, yes.
Can the bank be informed where the car can be collected and keys and papers handed over? Yes

Yes, my gut reaction is in agreement to these points.

Maybe important to stress that this was a personal loan. Her estate owns the car now I tend to agree. I think I am right in saying that the bank does not. The bank seems to be at a loss here. But, could funds be generated by selling off the car? Can the bank say: 'sell the car and pay back as much as you can get from it'.

MouseTail

icebergiceberg wrote: »

Yes, my gut reaction is in agreement to these points.

Maybe important to stress that this was a personal loan. Her estate owns the car now I tend to agree. I think I am right in saying that the bank does not. The bank seems to be at a loss here. But, could funds be generated by selling off the car? Can the bank say: 'sell the car and pay back as much as you can get from it'.

They can, but funeral costs are prioritised.

icebergiceberg

MouseTail wrote: »

They can, but funeral costs are prioritised.

So if car is sold, can it be said to bank the money was spent on funeral and there is no more in the estate?

This would not be the bank's priority of course, so by whom is the cost of the funeral prioritized ?

Thanks for your response.

MouseTail

icebergiceberg wrote: »

So if car is sold, can it be said to bank the money was spent on funeral and there is no more in the estate?

This would not be the bank's priority of course, so by whom is the cost of the funeral prioritized ?

Thanks for your response.

See 'If the deceased dies in debt' on this link. http://www.citizensinformation.ie/en/death/the_deceaseds_estate/dealing_with_the_deceaseds_estate.html

There would of course need to be invoices etc, and the costs not excessive.

Blingy

You need to find out the type of loan, unsecured, hire purchase and whether it was joint with anyone or if there was a guarantor.
If it's an unsecured loan and your sister was the only name on it then any funds left in her estate will be used to pay off the loan. That may include liquidating assets which would be selling the car. The bank cannot come after siblings, family etc to repay the debt.
It must be a difficult time for you but maybe give citizens advice a call to put your mind at rest.
Don't worry about people in the bank knowing you. This loan information is highly confidential and as far as I am aware they can only speak to the executor of the estate. Good luck.