MBNA Credit Card Debt - Late Father

[tango22]

My dad passed away suddenly last week and in sorting through his possessions we found an MBNA Credit Card. I informed the company the next day that he had passed in order to cease any further interest being accrued.

MBNA have now written to my mum to inform that the debt is a total of almost £15,000! We don't believe there is PPI as Dad looked into making a claim a couple of years ago and the reports came back blank.

My dad has no will as he had no assets and we are reluctant to instruct a solicitor and incur additional costs, so mum is the representative, but there's no executors as such. Plus I wouldn't know whether to speak to a private client or insolvency solicitor for the best advice on this.

In addition to MBNA he has c.£5,000 debt on a personal loan and only £400 in his current account. There are no other assets - the car he drove is owned by my mum and everything else is usual household possessions.

My mum and dad owned the property outright as Joint Tenants, so the house has transferred to my mum. It is worth £110k.

The letter from MBNA has said they will look to recover the money in June and may sell the debt to an external company.

I have read some articles mentioning an Insolvency Administration Order, but nothing that goes far enough to explain how this works and what the outcome will be. Is the IVO always agreed by the courts? If so, I assume the only option is for the debt agency to put a charge on the house, but this will severely impact my mum's chances of selling and being able to move house closer to me and my family - she now lives alone and has no family close by and is looking to sell when she retires in 3 years time.

Can anyone advise on the best action? Should I pre-emptively write to MBNA and tell them there is no estate, or should we seek legal representation?

[Kati]

Re: MBNA Credit Card Debt - Late Father

Welcome to LB @tango22 I'm so sorry for your loss xx

Was the credit card in his name only or jointly with your mother?
It might be worth having a look at this site - https://www.stepchange.org/debt-info...-and-debt.aspx

Unsecured debts and death

If a person dies and leaves behind unsecured debts (finance like personal loans and credit cards) what happens to these will depend on whose name the debts were in and whether the person had any assets like investments, savings or a house.

If the debts were in their name only

If the debts were only in the name of the person who has died, then these debts will either:

• be written off if the person didn’t have any assets, or
• need to be repaid if the person has left an estate (this could be anything from savings to a share in a house).

If your husband, wife or civil partner has died and they had a debt that was in their name only, you won't become responsible for it.
If they left a will, any beneficiaries named in it will only receive their inheritance once funeral costs have been covered and debts have been repaid.

I'll tag @Debt Camel for you too xx

[tango22]

Re: MBNA Credit Card Debt - Late Father

Thank you for the quick reply.

The credit card was only in my Dad's name x

[Debt Camel]

Re: MBNA Credit Card Debt - Late Father

First something I hope won't turn out to be an issue at all - Have you checked to see if there are any charges on the house? It's unlikely but you need to rule it out as your dad has clearly had debts your mum didn't know about.

Should I pre-emptively write to MBNA and tell them there is no estate,

No you can't do that because it's not true. Your dad died owning half of a mortgage free house. the fact that it automatically passed to your mum doesn't mean that it wasn't part of his estate.

Legal representation will be expensive and it's not obvious that there is anything they can do to help at the moment.

Does your mum have any op[tions to make a full & final settlement offer to MBNA? Does she have any savings? A pension fund she could get money out of? At this point they may well settle for less than the full amount.

How much do you know about this MBNA account? When was it taken out? I would be starting by asking MBNA to produce the CCA agreement for the debt and a statement of account.

That is a pretty big credit limit, can you find our when it was increased? Was your dad only making minimum payments? What were his finances like - could he afford these payments? What was his credit record like? Has he had money problems in the past?

These may sound like irrelevant questions, but it may be worth exploring if his estate has a potential claim against MBNA for irresponsible lending. See https://debtcamel.co.uk/refunds-catalogue-credit-card/ but these sort of complaints are pretty new and you shouldn't assume that it will be easy or that you will win the case.

[tango22]

Re: MBNA Credit Card Debt - Late Father

Mum doesn't have any options to pay the debt owed and I was of the understanding that she wouldn't be liable for it, so would be reluctant to make any offers of payment. They have already said it will likely go to an external company and I'm assuming they buy the debt for much less than £15k? She has a modest income and will have a proportion of my Dads pension paid to her, but this will pay household bills etc. It's by no means spare money.

Would MBNA willingly give me the information re date account opened etc? I know it was originally a virgin money account that was moved over and there is a letter from MBNA about him making minimum payments. He never spoke about money problems, but he was retired and the repayments were high, it looks as though outgoings were higher than pension each month.

I'm assuming no charges already exist on the property as land registry have returned a copy of the title without my Dad's name already and there is nothing listed.

[Diana M]

Re: MBNA Credit Card Debt - Late Father

Hello tango22

I'm sorry for your loss. You could do without these problems at this sensitive time in your life.

Creditors and banks take advantage of moments like these and circle like vultures.

The first thing to establish is whether this £15k MBNA account is 'enforceable'. Unless they can provide evidence of the credit agreement they won't be able to get their money.

I'll pop back tomorrow (just rushing out when I saw your post) and explain how to send a section 77-79 CCA Request to MBNA to establish your late father's legal position.

Do you have any idea when the MBNA (Virgin) account was opened?

Ditto the £5k loan and any other credit cards or loans which surface in the coming days/weeks.

Di x

[Diana M]

Re: MBNA Credit Card Debt - Late Father

Mum doesn't have any options to pay the debt owed and I was of the understanding that she wouldn't be liable for it, so would be reluctant to make any offers of payment. .

Yes your Mum does have options (see my previous post) and No she is not liable for your late father's debts.

I'm glad you've not made any offers yet

Di

[Diana M]

Re: MBNA Credit Card Debt - Late Father

Legal representation will be expensive and it's not obvious that there is anything they can do to help at the moment.

The OP does have options even if they are not obvious

Why do people always assume that legal representation is expensive?

Di

[Diana M]

Re: MBNA Credit Card Debt - Late Father

Was the credit card in his name only or jointly with your mother?

Credit card accounts can't be held in joint names.

Although there may sometimes be an additional card holder they are not legally liable for the debt, only the account holder is.

Di

[Diana M]

Re: MBNA Credit Card Debt - Late Father

I assume the only option is for the debt agency to put a charge on the house, but this will severely impact my mum's chances of selling and being able to move house closer to me and my family - she now lives alone and has no family close by and is looking to sell when she retires in 3 years time.

Your Mum is a long way off having a charge placed on the house. There'll have to be a court order before that will happen and your Mum can contest any application made.

Di