My dad has a car that is worth more than he owes on it. He wanted me to pay it off and keep it. The problem is he owes more unsecured debt than the car is worth. So if I pay it off with my money, to pay the creditors I might have to sell the car. I would essentially then be paying his crediters with my money. I don't know if I should pay the car off or let it go back or what. I was hoping someone had some advice.
Probate question
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Talk to a lawyer if you don't get any good responses. I would talk to a lawyer anyway in a situation like this. This is your $$ you are talking about.
Yeah a lawyer would know how to proceed. But I was trying to avoid hiring a lawyer since my dad squandered most of his income and the cost would make it moot.
I'm the executor and can buy or sell his porperty, but in order to transfer the car title I would have to go to probate. The problem is the creditors might require the vehicle be sold to pay them in part. The way I understand the situation if I let it go back I lose the chance to have it and the creditors get nothing. But if I pay it off I might have to sell it and the unsecured creditors are taking my money. Seems like a lose/lose either way.
I'm the executor and can buy or sell his porperty, but in order to transfer the car title I would have to go to probate. The problem is the creditors might require the vehicle be sold to pay them in part. The way I understand the situation if I let it go back I lose the chance to have it and the creditors get nothing. But if I pay it off I might have to sell it and the unsecured creditors are taking my money. Seems like a lose/lose either way.
Generally estates have to settle all debts before paying anything out, eg the equity in the car (even though it's negative equity) I don't know how one divvies up if there are more debts than assets. You'll probably wind up giving the car to the bank though.
Is this something you're in the middle of already, or anticipating in the future?
If the car has sentimental value, pay the rest yourself. If it doesn't, don't. You have the numbers.
You could also be straightforward with the bank, IE drive/tow the car over to a branch office and hand over the keys. When all is said and done you (as yourself, not as acting executor) might even be able to make them an offer before they send it to auction, in short doing a "short sale".
Beware of the bank and all creditors trying to rattle you for more than their fair share, seeing you lawyerless and navigating unknown territory.
Is this something you're in the middle of already, or anticipating in the future?
If the car has sentimental value, pay the rest yourself. If it doesn't, don't. You have the numbers.
You could also be straightforward with the bank, IE drive/tow the car over to a branch office and hand over the keys. When all is said and done you (as yourself, not as acting executor) might even be able to make them an offer before they send it to auction, in short doing a "short sale".
Beware of the bank and all creditors trying to rattle you for more than their fair share, seeing you lawyerless and navigating unknown territory.
use it for as long as you can than let them take it.. Only my opinion
Well I'd hate to let the car go back when only about 3 payments are owed. And if I don't make the payments they will reposess it. But I'd hate to pay it off only to have the unsecured creditors force its sell to be partially paid back. They can only go after probate assets and as far as I can tell this car is about it. Since the estate is insolvent maybe they will not bother with trying to collect.
3 payments and he owes more than it's worth? Sorry... confused.
I expect if he leaves debt the executor (you) will have to liquidate his assets as described on page 1 of the will... you getting his car, your sister his china, etc will be on page 49 so long as the debts are paid first.
I expect if he leaves debt the executor (you) will have to liquidate his assets as described on page 1 of the will... you getting his car, your sister his china, etc will be on page 49 so long as the debts are paid first.
The car is worth more than is still owed on it. But his unsecured debt is more than the car's worth. So if I pay the car off it's possible the creditors would end up taking my money if the car has to be sold to pay them. The creditors can only come after probate assets and you do not have to liquidate every personal item.
So the dilemma is should I just let it be repossessed and lose the opportunity to own it or pay it off and risk having to sell it and lose my money.
So the dilemma is should I just let it be repossessed and lose the opportunity to own it or pay it off and risk having to sell it and lose my money.
If he didn't have life insurance on the loan, (better check that) then let the executor or a lawyer handle it.
You'll worry yourself sick about it if you don't.
Probate suggests that your father is dead; but your story talks as if he's alive. Why call it probate if he's still with us?
You'll worry yourself sick about it if you don't.
Probate suggests that your father is dead; but your story talks as if he's alive. Why call it probate if he's still with us?
I was the executor for my uncle's estate. We had the family lawyer handle the legal work, and even with their assistance, it still took a year before the estate was completely settled. With all the legalities involved in settling an estate, satisfying creditors, and paying the required taxes, I'd highly recommend you get an attorney. At least where I live, they are limited to charging no more than 10% of the estate value as their fee.
With the unsecured debt and not enough other assets to pay off the unsecured debt, I don't see how you can retain the car. In order to attempt to satisfy the other creditors', a sale at fair market value would allow you to pay off some percentage of the debt, after the payoff amount to the car finance company is done. This amount should be less than the three months' payments remaining.
I don't see letting the car going back or being repossessed as in anyone's best interest. Better to sell at fair market value and use those assets (after pay off to the lien holder)to pay what debts you can. Need to talk to a lawyer about how to handle the remaining debt and whether to pro-rate payments so every creditor gets a near equal percentage amount.
Also note that if he is drawing a Social Security payment, the one coming in January is not due him and needs to be returned. You need to call the SSA 800# ASAP and report his death if you have not already done so.
I don't see letting the car going back or being repossessed as in anyone's best interest. Better to sell at fair market value and use those assets (after pay off to the lien holder)to pay what debts you can. Need to talk to a lawyer about how to handle the remaining debt and whether to pro-rate payments so every creditor gets a near equal percentage amount.
Also note that if he is drawing a Social Security payment, the one coming in January is not due him and needs to be returned. You need to call the SSA 800# ASAP and report his death if you have not already done so.
You are basically correct, the car would need to be sold at market value and the proceeds after the payoff would be used to pay any taxes he might owe, attorney fees and last his unsecured debts.
But what is the point in me even getting involved with probate just to pay off unsecured debt? I'm not legally required to enter probate or do anything and it doesn't seem to have any upside other than settling the creditors accounts so they won't be calling, and the downside of being responsible as executor if the estate is mismanaged. Since the estate is insolvent I'd probably need a lawyer to go through probate and there will be nothing left for the Will's benefeciaries after probate. I will talk to a lawyer though about how best to proceed.
The funeral home notified SS and I notified the employer he retired from.
But what is the point in me even getting involved with probate just to pay off unsecured debt? I'm not legally required to enter probate or do anything and it doesn't seem to have any upside other than settling the creditors accounts so they won't be calling, and the downside of being responsible as executor if the estate is mismanaged. Since the estate is insolvent I'd probably need a lawyer to go through probate and there will be nothing left for the Will's benefeciaries after probate. I will talk to a lawyer though about how best to proceed.
The funeral home notified SS and I notified the employer he retired from.
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I don't see letting the car going back or being repossessed as in anyone's best interest. Better to sell at fair market value and use those assets (after pay off to the lien holder)to pay what debts you can.
I agree with paying off the car since its almost paid off.
An attorney in your state that deals with probate would offer the best advice.
I don't see letting the car going back or being repossessed as in anyone's best interest. Better to sell at fair market value and use those assets (after pay off to the lien holder)to pay what debts you can.
I agree with paying off the car since its almost paid off.
An attorney in your state that deals with probate would offer the best advice.
Do a search on insolvent estate resolution. There are some articles about the possible disadvantages of going through probate with an insolvent estate, and a discussion of the court protections provided if you probate it.
It appears, though, that probate would provide a finality to every financial decision you propose and is validated by the probate judge. While you are not liable for your Dad's unresolved debts, you may spend a lot of time mailing out replies to letters of indebtedness.
Probate, once done, would provide finality to the allocation of assets. Personally, I don't know what that is worth, and of course, a lawyer will be paid fees that might go to pay down more debt. I would talk to a lawyer and get an estimate of his fees before I even started down either path. That consultation might be free or minimal.
It appears, though, that probate would provide a finality to every financial decision you propose and is validated by the probate judge. While you are not liable for your Dad's unresolved debts, you may spend a lot of time mailing out replies to letters of indebtedness.
Probate, once done, would provide finality to the allocation of assets. Personally, I don't know what that is worth, and of course, a lawyer will be paid fees that might go to pay down more debt. I would talk to a lawyer and get an estimate of his fees before I even started down either path. That consultation might be free or minimal.
Yeah I agree. Since the estate is insolvent it would just be more work for me to probate it, but best case scenario it would not end up costing me much out of pocket if anything and would put finality on the finances. I don't really agree with unsecured creditor being allowed to take secured assets like a car etc, but probate is more about protecting creditors than anything. I'll have to talk to a lawyer.
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