What happens to debt when someone dies?

A creditor’s letter addressed to someone who has died, or a call asking you to “settle the account”, can make it sound as if the debt is now yours. Usually it is not. Citizens Advice says you are not automatically liable for the debts of someone who has died, even if you were their husband, wife or civil partner or lived with them. This guide explains when you are, and what happens to the rest.

Which debts can you be liable for after someone dies?

Only debts that were legally yours as well. The main ones are:

If a debt was in the dead person’s sole name and there is nothing in the estate, National Debtline says nobody else can be made to pay it. Debts you are liable for yourself keep their priority. A joint mortgage, a joint tenancy or council tax arrears you are liable for are priority debts, so deal with them first: see priority debts.

What does the executor have to do about debts?

The executor (or the administrator, if there is no will) is the person who deals with the estate. They must pay the debts and taxes before anything goes to the people who inherit. GOV.UK says this includes unpaid bills, unpaid personal tax and any overpaid benefits.

1. List everything the person owned and owed.
2. Pay funeral and administration costs, which come before most debts.
3. Advertise for creditors. GOV.UK says to place a notice in The Gazette giving creditors 2 months to claim, and not to share out the estate until the 2 months are up.
4. Pay the debts, then distribute what is left.

Being named as executor does not make you liable for the debts themselves, only for dealing with the estate properly. If it is complicated, or you are unsure whether the estate can pay everything, get legal advice before paying anyone.

What happens if the estate cannot pay all the debts?

An estate is insolvent if the funeral costs, administration costs and debts come to more than everything it owns. The executor must then pay in a set legal order, and National Debtline says getting the order wrong can make the executor personally liable:

1. secured creditors, such as a mortgage lender
2. reasonable funeral, administration and testamentary expenses, such as probate and solicitors’ fees
3. preferential debts, for example wages owed to anyone the person employed
4. ordinary unsecured creditors, such as credit cards and loans, who share what is left in proportion to what they are owed
5. interest on unsecured debts
6. deferred debts, such as informal loans from family

Whatever is still unpaid at the end is not passed on to the family, unless someone is liable in their own right.

What about a home owned jointly?

If the home was owned as joint tenants, the dead person’s share passes automatically to the surviving owner and is not part of the estate. But if the estate is insolvent, a creditor can ask the court for an insolvency administration order, which can reach the dead person’s share of the home. National Debtline says a creditor has five years from the death to apply, and that this is uncommon. If the home was owned as tenants in common, the dead person’s share is already part of the estate. Either way, get advice before agreeing anything with a creditor.

How do you tell creditors and stop the letters?

• Tell Us Once. In England, Scotland and Wales, the registrar gives you a reference to report the death to most government organisations in one go. You must use it within 28 days of getting the reference.
• Banks and building societies. The Death Notification Service tells several at once.
• Other creditors. Write to each one with a copy of the death certificate, the executor’s details, and a note if there is little or no money in the estate. Ask them to freeze interest and charges while the estate is dealt with.
• Junk mail. The Bereavement Register is free and removes the person’s name from mailing lists, stopping most advertising mail within about six weeks.

Scotland and Northern Ireland

Scotland. The executor applies to the sheriff court for “confirmation”, the Scottish equivalent of probate. Debts owed by the estate normally have to be paid before anyone inherits, and if the estate is insolvent creditors must be paid in a legal order of priority, so executors should get legal advice before paying anyone. Tell Us Once is available. See also debt solutions in Scotland.

Northern Ireland. Tell Us Once is not available. Instead, report the death to the Department for Communities Bereavement Service, which tells any benefit office involved. nidirect also lists the Bereavement Register and the Deceased Preference Service for stopping post. Executors apply for probate through nidirect. For debt solutions there, see Northern Ireland.

Can debts after a death go into an IVA, DRO or bankruptcy?

Not the dead person’s debts in the usual way. An IVA, debt relief order (DRO) or bankruptcy is for a living person. An insolvent estate is dealt with by the executor paying in the legal order above, or by the court making an insolvency administration order, which puts the estate in the hands of the official receiver as trustee.

• If the person died during an IVA, the supervisor can ask the court for an insolvency administration order if the IVA depended on payments from their future earnings.
• If a bankruptcy petition had already been made, the bankruptcy usually carries on as if the person were still alive.

Debts that are legally yours, such as a joint loan or a guarantee you signed, are different. They are your own debts, so they can be included in your own IVA, DRO or bankruptcy like any other, subject to the usual rules for each. Debt solutions compared sets out how those options differ.

What to do next

1. Do not pay any debt from your own money until you know whether you are liable for it.
2. Find out who the executor or administrator is, and pass creditors’ letters to them.
3. If you are the executor, list the debts, place a Gazette notice and wait 2 months before sharing out the estate. Get legal advice if the estate may be insolvent.
4. If you have been left with joint debts you cannot afford, get free, impartial debt advice from MoneyHelper, StepChange, Citizens Advice or National Debtline. See where to get free debt advice.

For other kinds of debt, see types of debt. If you use our checker, we may pass your details to a licensed insolvency practitioner or debt adviser.