What Happens to Debts After Someone Dies?
When someone passes away, sorting out their financial affairs can feel overwhelming. Debts don’t vanish, but neither do they automatically become your responsibility. Here’s exactly how debts after death work in the UK, step-by-step.
- Debts come from the deceased’s estate—not your personal funds.
- Joint debts or guarantor loans can pass to survivors.
- Priority debts (taxes, secured loans) must be paid first.
- If there’s not enough money, creditors may get partial or no repayment.
Contents
Who is responsible for paying debts?
In most cases, debts are paid out of the person’s estate—the money, property, and possessions they’ve left behind. Family members, friends, or executors are not personally responsible for paying those debts from their own money.
There are a few exceptions, like jointly held debts or guarantor loans, which we explain below.
What counts as a debt?
A “debt” is anything the person owed when they died, such as:
- Unpaid credit cards or loans
- Overdrafts or mortgage balances
- Utility bills or council tax
- Private medical fees
- Overpaid benefits or tax credits
- Funeral expenses (if unpaid)
If they had a jointly held loan or mortgage, the remaining person usually takes on responsibility for the rest.
How debts are paid from the estate
The executor or administrator of the estate handles this part. They’ll need to:
- Collect information about all debts and creditors
- List the value of all assets in the estate
- Apply for probate if required
- Use estate funds to pay off debts before giving anything to beneficiaries
If the estate has enough funds, all debts should be settled in full. Some priority debts (like secured loans or tax owed) must be paid first.
Executors are not personally responsible for paying debts from their own funds.
What if there isn’t enough money?
If the estate doesn’t cover everything, it’s called an “insolvent estate.” In this case:
- Debts must be paid in a legal order of priority
- Some creditors may get nothing
- No money or assets can be passed to beneficiaries
- Family members are not responsible for covering the shortfall
If you’re unsure, speak to a solicitor or ask Farra for help. Handling an insolvent estate wrongly could make you personally liable.
Coming soon: Farra’s debt tracker
Farra will soon help you log known debts, get template letters for creditors, and avoid mistakes when handling estates with limited funds.
What to do next
Dealing with money matters after a death can feel uncomfortable. But you’re not alone—and you don’t have to do it all at once.
- Get a copy of the credit report (optional but helpful)
- Use Farra to track debts and notify organisations
- Only pay debts from the estate—never your own funds
- Seek help if the estate is insolvent
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