Dealing with someone’s finances after they die is hard enough without worrying about their debts. Here’s the basic position in England and Wales.
The short answer
- Debts are paid from the person’s estate: their money, property and possessions.
- Relatives don’t inherit debts personally.
- If the estate can’t pay everything, it’s insolvent and unpaid debts are usually written off.
- Joint debts and guarantees remain the responsibility of the other person.
- Executors should follow the legal order of payment.
What is the estate?
The estate is everything the person owned at the time of death, minus what they owed. Before anyone inherits under a will or the intestacy rules, the executor or administrator must pay valid debts from the estate.
What if there isn't enough money?
If the estate can’t pay everything, it’s insolvent. Funeral costs and administration costs come first, then secured debts, then priority debts, then unsecured debts shared fairly. Debts that can’t be paid are usually written off. Executors shouldn’t pay any creditor in full before checking the estate can cover everyone.
Which debts can affect family?
- Joint loans, overdrafts or mortgages.
- Debts the family member guaranteed.
- Council tax, if they lived together and were jointly liable.
What about IVAs and other debt solutions?
See what happens to an IVA if you die. MoneyHelper has a full guide to dealing with someone’s money after death.
Common questions
Do children inherit their parents' debt?
No. Children aren’t responsible for a parent’s debts unless they shared the debt or guaranteed it.
Are credit card debts written off when you die?
They’re paid from the estate if there’s enough. If not, the unpaid balance is usually written off.
Do I need to tell creditors when someone dies?
Yes. The executor should tell creditors and ask them to freeze the accounts while the estate is dealt with.
Getting help
You don’t have to deal with debt on your own. Free, impartial advice is available from MoneyHelper, StepChange and National Debtline. If you want to talk through whether a formal solution such as an IVA could be suitable, you can also get in touch with us.