Deceased person & car loan

MonicaBing

Morning all, my dad passed away a few months ago and my mom is only now in a position to deal with his affairs. She forgot that he had a car loan with Aib and went into them last week to sort it out, under the advice from others she was told that as she is not a co signee of the loan, that the debt would be null and void and she would not be responsible for it. In she went and they made an absolute disgrace of my mom. They told her that if she does not clear the loan that they will go after his "estate" to clear it. She is a pensioner working a small part time job and is just about able to keep her head over the water, the life insurance payout will just about cover the funeral and ensuing costs.
Citizens advice bureau have advised her that she is not liable for the loan but I'm looking for some absolute clarity on the situation please if anyone can help.

Thank you.

myshirt

The bank are correct, though they shouldn't be as heavy handed with your mother. It's not appropriate. They can treat the situation with sensitivity while also insisting on the immediate clearance of the loan. No need for them to be aggressive.

In any event, did your father leave a will? Or did he die without one? (Intestate)

Do you know if the life assurance was assigned in trust to your mother? Were they both insured. Etc.

MonicaBing

Hello and thanks for replying, unfortunately dad passed away suddenly and there was no will, he had been out of work for about 2 years previous.
It was inappropriate considering this all took place at the counter and was quite public, she was so overcome that she broke down at her work over it and is in quite a worried state about the implied repercussions.

MonicaBing

And sorry yes they are both insured with the same policy and company, it's not in a trust.

myshirt

Ask the bank for some forbearance while your mother sorts out her affairs. Step in yourself, or go to a solicitor. Take out letters of administration that will allow your mother or you to gather information on all your father's assets and all his liabilities. Once you have that, you must pay off the liabilities from the estate and distribute the rest in a certain order according to law. Your mother will be first in the Q, but it will be after all the bills are settled.

If there is not enough money you might have to pay pro rata / share it out. In that scenario your mother will get no money. As for the funeral expenses, the funeral home may bill your mother rather than your father's estate to ensure they get paid. Just ensure you don't spend any of the estates money without first establishing who it is to be paid to.

If it's all confusing or your head is not in it, just go to a solicitor and get a quote. It won't be as expensive as you think.

Peregrinus

1. The bank's behaviour, as described, is appalling. I would complain on your mother's behalf.

2. If the loan account is not a joint account, your mother is not personally liable for it. But that does not mean the loan goes away; it remains an obligation of your father's estate, and must be paid out of whatever assets he has left.

3. It will presumably be some time before your father's affairs are sorted, and in the meantime interest on the loan will continue to run. Although your mother is not obliged to pay or service the loan out of her own resources, if she can manage it it may be in her interests to do so voluntarily, since it will avoid heavy interest charges or other penalties or, in the worst analysis, the attempted repossession of the car. Since your father estate is (presumably) going to come to your mother eventually, either she pays off the loan directly out of her own resources, or indirectly by having it deducted from the estate assets before they come to her. She is not obliged to pay it off directly, but it may be cheaper to do so.