What happens to debts when someone dies and how to pay them

If the estate doesn’t cover everything, any remaining debts are usually written off. 

If there’s no estate at all, the debts generally die with the person.

Surviving relatives are not usually responsible for paying the debts of the person who has died from their own money, unless they were a guarantor or co-signatory on a loan or credit agreement.

Find out more in our guides:

• How to sort out an estate when someone dies leaving a will: a step-by-step guide
• How to sort out an estate without a will: a step-by-step guide.

Being an executor or administrator doesn't make you personally liable for the person’s debts, but it's important to take steps to protect yourself before distributing the estate. 

Place a “Deceased Estates Notice” in The GazetteOpens in a new window and in a local newspaper where the person lived. This gives any unknown creditors the opportunity to come forward with claims before assets are distributed. 

Wait at least two months from the date of the notice before distributing the estate. If you skip this step and a creditor comes forward after distribution, you could be held personally responsible for that debt — meaning you may have to pay it from your own money. 

It’s worth knowing that these notices only protect the executor or administrator, not the people who inherit from the estate. If a creditor comes forward after the two-month notice period ends, they can still ask those who inherited to pay them back, though only up to the amount they received from the estate. 

These notices also won’t protect the executor or administrator if they knew about a creditor (or should have known about them) but simply couldn't track them down.

You can also check the person's statutory credit report for any registered debts and contact the relevant creditors directly. Find out more in our guide How to check your credit report for free. 

For complex estates, or if the person who died had debts greater than their assets, it's worth speaking to a solicitor or probate specialistOpens in a new window you can find one through the Law Society website.  

In Scotland, there is no formal process for notifying creditors when someone dies. Executors should take reasonable steps to identify any debts owed by the estate.  

If you’re unsure whether all debts have been identified, consider getting legal advice before distributing the estate. 

Go through the person’s papers and financial statements and write down everything they owed.  

Understanding what type of debt has been left behind will help you work out what needs to be paid and by whom. 

These are debts in the name of the person who has died only, such as a personal credit card. They are paid from the estate. If there isn't enough in the estate to cover them, they are written off. 

Family members, a spouse, or a civil partner cannot be asked to pay individual debts from their own money, unless they provided a personal guarantee. 

These are debts taken out in more than one name, such as a joint mortgage or a joint account overdraft. In most cases, the full outstanding balance passes to the surviving borrower. 

If you’re worried about keeping up with repayments, start by checking whether there’s an insurance policy that covers the debt. If not, contact the lender to discuss your options. Many will work with you to find a more manageable arrangement. 

For more information, see our guide What you need to know about taking out a joint loan. 

A secured debt is tied to an asset, usually a property. How it’s handled depends on how the property was owned. 

If the person who died owned the property on their own, any outstanding mortgage will usually need to be paid off from the estate. However, if the person who died left the property to someone as a specific gift in their will, that person might have to take on responsibility for the mortgage instead, depending on what the will says. 

If you were joint tenants (where each person owns the whole property together), the share belonging to the person who has died passes automatically to you. This means it does not form part of the estate and cannot be used to pay off other estate debts. However, you will usually become responsible for the full secured debt, for example, a mortgage, and remain responsible for keeping up with mortgage repayments as normal. 

If you were tenants in common (where each person owns a specific share), the share belonging to the person who died can be taken into account when settling all estate debts. If their share in the asset isn't enough to cover their portion of the secured debt, their other assets in the estate may also be used to cover the shortfall. Whoever inherits their share in the asset may also become responsible for the secured debt with you. In the case of a property, this might require you to get a new joint mortgage. 

If you’re not sure how a property was ownedOpens in a new window, you can check with HM Land Registry for a small fee. This applies to properties registered in England and Wales. If the property isn’t registered, you'll need to check the title deeds. 

• For more information, see our guide Secured and unsecured borrowing explained. 
• In Northern Ireland you can check on the Land Registry for Northern IrelandOpens in a new window

Unsecured debts such as personal loans, credit cards, and utility bills, are not tied to any asset.  

Creditors cannot take your home or car to recover them.  

They are paid after secured and priority debts, once those have been settled. 

In Scotland, jointly owned property is treated differently from in England and Wales. Some jointly owned property passes automatically to the surviving owner when one person dies.   

If the property does not pass automatically, the deceased person's share will form part of their estate and will be distributed according to their will or, if there is no will, the intestacy rules. If you’re unsure how a property was owned, it's important to get legal advice before distributing the estate. 

In Scotland, a surviving spouse or civil partner and any children may be entitled to claim part of the deceased person's money, savings, investments and belongings. These claims are known as legal rights.  

Legal rights can apply even if the person who died left a will. As they can affect how the estate is shared out, executors should consider any legal rights claims before distributing assets to beneficiaries. 

Contact all known creditors as soon as you can. Let them know the person has died and that you’re working through the estate. Ask each one for a written statement showing the outstanding balance. 

Once they know the situation, they should pause any demands and give you time to sort things out. Getting letters or calls chasing payment at such a difficult time is distressing. Most creditors will back off once they’re informed. 

For individual debts, ask for a statement or letter showing the outstanding balance on the debt. 

For joint debts: 

• check the terms of the loan 
• ask them to take out your partner’s name from the bills and transfer all future bills to your sole name 
• if you can’t afford to pay each instalment in full, see if you can renegotiate the repayments to an amount and schedule you can manage.

Before paying any debts, check whether the person took out insurance to cover them, for example, a life insurance policy designed to pay off the mortgage. 

Check the terms and conditions of any policy carefully. Some policies, such as payment protection insurance, only pay out for unemployment or illness, not death. If you can make a valid claim, use the proceeds to pay off the relevant debt. 

In most cases, life insurance payouts go directly to a named beneficiary and don’t form part of the estate.  

If no beneficiary was named, the payout may be used to settle debts, depending on the policy terms.

Before paying any debts, you can pay out two categories of costs from the estate: 

• funeral expenses - these should be reasonable and proportionate to the size of the estate 
• estate administration costs - this can include probate fees and any other costs incurred in administering the estate. 

If family members cover the funeral costs themselves and later try to recover this from the estate, they may find themselves lower down the list of priority creditors. Where possible, funeral costs should be paid directly from the estate. 

After these costs, debts must be settled in this order: 

1. Secured debts, such as a mortgage. 
2. Preferential debts, such as wages owed to the person’s employees.
3. Priority debts, such as Income Tax and Council Tax and unsecured debts, such as utility bills, credit cards. 

If the estate is in Scotland, the order is different. After secured debts are paid, other debts must be settled as follows:   

1. Privileged debts, such as death-bed costs, funeral expenses and probate fees. 
2. Preferred debts, such as pension contributions, wages owed to the deceased's employees, and tax obligations including Inheritance Tax, Income Tax and Council Tax. 
3. Ordinary debts, such as credit card debt, utility bills and personal loans. 

If the estate doesn't cover everything, work through the list in order until the money runs out. 

If the estate includes assets like a car or property, it may be worth selling them. However, there's a set order for using the person’s assets to pay off debts, based on how they left things in their will: 

1. First, use the residue – this means any assets that weren't left to a specific person. 
2. If that’s not enough to cover the debts, use any cash gifts left to people (called pecuniary or general legacies). 
3. Only if there's still not enough should specific items left to people (called specific legacies) be sold to pay off the remaining debts. 

If the debts are worth more than the assets, this is called an insolvent estate. These situations can be complicated and every case is different, so it's a good idea to speak to a solicitor if this applies to you.  

Dealing with debt on top of grief can feel overwhelming. You don’t have to manage this alone. 

If you’re struggling to keep up with joint debts, or if the loss of a partner’s income has made your own finances difficult, speaking to a free debt adviser is one of the most helpful things you can do. Most people who get debt advice say they feel less anxious and more in control afterwards. 

A debt adviser will: 

• listen without judgement 
• explain options you may not know about 
• help you find a way forward, whatever your circumstances 
• check you’re receiving all the benefits and entitlements available to you. 

You can get free, confidential debt advice online, over the phone, or face to face. Use our Debt Advice Locator tool to find support near you.