# estate is insolvent...what to do?



## mutley10 (28 Feb 2011)

hello all
my stepfather died last year and ive been told his estate is insolvent. there are some complications for me as follows...
ive been financially supporting him for the last few years of his life and crucially paying his mortgage as well as being a guarantor on the understanding that the house was going to be left to me, the will does state this.
his solicitor is not doing anything as he says theres no money to pay for him, there are outstanding debts to the estate and i am being personally sued by the undertaker as i arranged the funeral.

i am arranging a loan to pay the undertakers as i cannot afford to go to court and the other family members will not pay
my question is what happens next? 
should i just stop paying the mortgage and let the house be repossessed, my fear as a guarantor is the negative equity?

hoping someone can point me in the right direction as i cant get anything coherent from his solicitor and im reluctant to get another one as my access to more funds is limited.

thanks in advance


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## Bronte (28 Feb 2011)

Instead of a loan to pay the undertaker would he accept a monthly direct debit?

Did your stepfather not have life insurance for the mortgage?


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## truthseeker (28 Feb 2011)

Have you applied for the Bereavement Grant, see  - this may help with the undertaker expenses.


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## mutley10 (28 Feb 2011)

thankyou for your replies.
no he couldnt get insurance cover due to his age, it was down to me which i agreed to assuming i was to get the house after his death.
have just been told that as he was self employed he does not qualify for the bereavement grant, but thanks for the suggestion.


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## csirl (28 Feb 2011)

Generally speaking, when someone dies, their debts die with them. So if someone is insolvent, the estate gets liquidated and the resulting cash (if any) is used to pay off some of the debts. The debts remaining after all assets have been liquidated dont get paid and have to be written off by the creditors.

The house is a different matter as you have given a guarantee to the bank that the debt on this will be paid. You'll have to look into the details and extent of the guarantee before you know what course of action to take.


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## mutley10 (28 Feb 2011)

thanks for your reply csirl
it would be simple except for the guarantee i have signed, i would happily walk away.
the house is in negative equity so liquidating is unlikely to get me off the hook!

i guess in my naivety i didnt expect to be hit with all the funeral costs, i was carrying out his wishes and was led to believe by him there was funds to cover it!

harsh lesson for me...trust no one!


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## Brendan Burgess (28 Feb 2011)

> his solicitor is not doing anything as he says theres no money to pay for him,



That's fair enough in a way.

But who is the executor?  Is the solicitor the executor? If so, he should give up the executorship and you will have to take over. 

Speak to the bank. They might cut a deal with you.

Brendan


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## mutley10 (28 Feb 2011)

thanks brendan, yes i understand the stand taken by solicitor, ive now agreed (no choice really) to take over everything.


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## Padraigb (1 Mar 2011)

You're on the hook for funeral costs. You are responsible for any shortfall on your father's home. That's tough on you, and you have my sympathy.

It needs to be established who is to act as executor. What does the will say? If you are a nominated executor, you can take out probate yourself without involving a solicitor. It's a bit of work, but it's manageable if you are comfortable with forms and jumping through procedural hoops. Having a Grant of Probate could be very helpful in dealing with the mortgage lender, because if they proceed without your co-operation, you might get a worse deal than if you worked with them towards a resolution of the problems.

Which might serve your interests better: to take over the house and continue paying the mortgage, or to sell it soon and take the loss? [Have you a home of your own?] If the house is to be sold, I would certainly follow Brendan's advice and try to make a deal with the bank.

Are there any good bits to alleviate the gloom, things like a deposit account, or a few valuable items that can be sold? Or are there other debts hanging over the estate?


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## Bronte (1 Mar 2011)

What does have to be sorted is the guarantee.  Can you post up the wording of the guarantee.  I think you need to make an appointment with the bank to find out what needs to be done. 

This is very messy, you've been left a property in negative equity, in the normal course of things this would mean that you are left with nothing but you are left it seems with the liability of paying off the mortgage via the guarantee.   Did the solicitor give you any advice on this.  I think you may need to get some professional advice on the guarantee and for this you will have to pay.  

How much is the negative equity, maybe the bank will allow you to sell and then repay the negative equity as a personal loan, or even better on the same terms and conditions as the mortgage.  Some banks have agreed this for some people.  

Do you have a job, do you have assets?


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## mutley10 (11 Mar 2011)

thanks for the replies so far.
i dont own any property myself but do have a reasonable job, my circumstances were much better when i agreed to cover the mortgage and was told i would be left the house. however i didnt know much about the rest of the estate and never considered the debts involved!
looking at the situation now, i feel he was very badly advised by his own solicitor in making his will with no provisions made regarding his personal circumstances.

ive been in touch with the probate office who say they will not consider any personal application as its not straightforward and they have advised me to get a solicitor!! more cost for me!

looks like i have no real option but it will mean more money after bad! only for the guarantee, id be walking away from the whole mess.
on top of this, my step fathers blood family are being aggressive to me and obviously are not interested in giving any financial support!


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## elcato (11 Mar 2011)

Sorry for asking but I'm wondering how your stepfather got a loan for a house without insurance. Was this an arrangement you made as an investment for yourself and basically allowing your stepfather to live in it for his last few years ?


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## mutley10 (12 Mar 2011)

hi elcato, due to his age he was not able to get the mortgage by himself. i wanted to 'buy' the house but he didnt want to do it this way incase i put him on the street. that only left me with 2 choices, sign guarantor or walk away.


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