What Happens to Debts After Someone Dies?
What You Need to Know
Debts are paid from the deceased's estate (their money, property, and possessions), not from your personal funds. You're only liable if you were a joint account holder or guarantor. The estate pays debts in priority order—secured debts and taxes first, then unsecured creditors. If the estate can't cover all debts, it's insolvent and creditors may receive partial or no payment.
Have more questions on UK death administration? Let Farra help.
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, as explained by Citizens Advice. 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, as explained by StepChange Debt Charity.
How debts are paid from the estate
The executor or administrator of the estate handles this part, as explained in Which?'s probate guide. 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.
Debt Priority Order in UK
Legal Payment Order
UK law requires debts to be paid in a specific order when an estate is insolvent, as outlined by MoneyHelper.
1. Secured Debts (Highest Priority)
- Mortgages and secured loans
- Hire purchase agreements
- Any debt secured against property
2. Funeral and Administration Costs
- Reasonable funeral expenses
- Probate court fees
- Estate administration costs
3. Government Debts
- Income tax and capital gains tax
- Council tax arrears
- Benefit overpayments
4. Unsecured Debts (Lower Priority)
- Credit cards and personal loans
- Utility bills
- Medical bills and other trade debts
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
Farra helps you stay organised with debt checklists, reminders, and gentle nudges when you're ready.
Important Reminders
Never Pay from Personal Funds
Estate debts must only be paid from estate assets. You are not personally liable unless you guaranteed the debt or it was a joint debt.
Get Professional Help if Insolvent
If debts exceed assets, seek legal advice. Incorrectly handling an insolvent estate can make you personally liable for losses.
Document Everything
Keep records of all debts, payments, and correspondence. This protects you if beneficiaries or creditors question your actions later.
Try Farra – and take it one calm, clear step at a time.
Next step: Stay organised with Farra
Simplify debt management, get template letters, and clear guidance on notifying creditors—coming soon with Farra.
Download your free checklist →Related Guides
Applying for Probate
Probate required to settle debts from the estate
Probate Checklist
Complete checklist including debt reporting
Probate Threshold UK 2025
When probate is needed to access funds
Access Funds to Pay for Funeral
Release estate funds before probate for immediate costs
Emergency Financial Help
Support available when facing debt and costs
Notifying Banks After Death
How to inform banks about debts and accounts
Estate Administration Checklist
Managing estates and settling debts correctly
Complete Probate Guide UK 2025
Comprehensive guide to handling estates and debts
Joint Debt After Death UK
When you're responsible for jointly held debts and loans
Mortgage Debt After Death
Dealing with property mortgages as priority secured debts