Debt - And Death !

The Hayne  Royal Commission into the banking industry has already publicly exposed acts of bastardry in the areas of overcharging for their services - and even billing for services they knowingly did not provide.  Year after year this continued unabated while the publicly funded industry setup to police banking sat on its hands and did nothing to impose justice.

One of the areas that caused distress to the families of bank customers was the lack of compassion from the banks when the family breadwinner died with an unpaid debt remaining.   The banks are relentless in recovering money owing and usually this resulted in a stream of demanding letters addressed to that dead person arriving in the family letter box.

Many people contend that when a person dies, their debts die with them, but that is not the case under Australian law.  It is helpful if the deceased has left a will to instruct the distribution of assets, but in the absence of a will that distribution proceeds according to a formulae and registered debts are recovered in that process.

It is necessary for the assets of a deceased person to be granted probate by the Supreme court and that is best handled by a trained lawyer.  It requires a notice to be inserted in the local newspaper requiring debts against the estate to be proven within a time scale and the granting of probate is merely the official sanction for the remaining assets to be distributed.

If the deceased was living alone there may be debts for phone and electricity, and perhaps work done on the deceased car by a local mechanic.  It becomes more complex if the deceased was a partner in a business or if property is involved.  If a home is subjected to a remaining mortgage recovery of the money owing may necessitate the sale of the property, or the beneficiary may agree with the bank to accept liability for the mortgage in their own name.

The vast majority of deceased estates are settled without problems.   It becomes more complex if the deceased was running a business in partnership with someone else and the value of that business depends on it continuing operation without pause.  It can become very complex if the business involved is a family farm and both the value of stock and plant and equipment needs to be taken into account

Such complex issues are usually beyond the ability of the average person to negotiate and the banks are notorious for safeguarding their own position.  Should the assets of the deceased have complexities it is essential that processing the estate be put in the hands of a competent person with legal knowledge who will force the banks to act within the statutes of the law.

Despite the findings of this banking Royal Commission it is unrealistic to expect the banks to err on the side of generosity when it comes to finalising estates.  Dependents would be well advised to immediately seek legal representation to avoid the recriminations that are unavoidable when dealing with institutions that will always make judgements in their own favour.