Deceased Debt


My father in law recently passed away and has no Will, there are no assetts, therefore there is no estate or executer.
He lived in a rented property with his wife who also has no assetts.
His only surviving relatives are his wife my husband (his son )and a daughter.
He leaves behind a motor vehicle financed through the car yard (bank of Melb) and still owes money on this loan., he went bancrupt last year but kept the car loan payments up so he could still keep the car! The car loan is in his name only. My question is what should we do? I have informed the bank of the circumstances and are currently waiting for the death certificate. They said we need an executer or letters of administration but we do not see why as there is no estate, no assetts just this debt! Are we his family responsible for his debt? We are hoping they will just repossess the car? How should we deal with this matter?

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    Best answer

    Hi Joannel

    You have done the right thing, telling the creditor is always the best first thing to do. You should check with them to see if there is a guarantor for the loan. If there is, then this person will be responsible for the debt.  If not, you are very unlikely to be responsible for the debt. Your FIL’s estate is responsible. This may mean the repossession and/or sale of the vehicle. It will depend what the vehicle is worth and what the outstanding debt amount is. This is where an executor/administrator usually comes in. 

    In the absence of a guarantor, and the car being worth less than the debt, the creditor will have to bear the loss.

    I am not a lawyer, but that is my understanding. You should give the Public Trustee a call in your State. They can help you further if you need it.

    Good luck!

    Law Noob Answered on 20 June 2016.
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