Farra is a death administration assistant for UK families. Get step-by-step guidance for registering a death, applying for probate, notifying banks, and managing bereavement admin. From essential documents to practical checklists, Farra simplifies estate paperwork and funeral-related tasks so you can focus on what matters.
When debts exceed assets, follow the strict creditor priority order. Beneficiaries receive nothing. Executors who pay in the wrong order face personal liability. Get professional advice immediately if you suspect insolvency — do not distribute anything until you know the full picture.
An estate is insolvent where the total value of the deceased's debts and liabilities exceeds the total value of their assets. Debts include:
The first step when you suspect insolvency is to prepare a complete asset and liability schedule. Do not guess — request formal statements from all creditors and obtain professional valuations for assets. Our estate administration checklist covers the full process of valuing the estate.
If the estate is solvent, the normal rules apply and our debts after death guide explains priority.
The Administration of Insolvent Estates of Deceased Persons Order 1986 applies the priority rules from insolvency law to insolvent estates. The order of payment is:
Fees of insolvency practitioners and court costs if a formal administration order was obtained
Funeral costs, probate fees, executor's reasonable expenses
Mortgages and secured loans — paid from the proceeds of the secured asset
Employee wages (up to statutory limits) and certain pension contributions
HMRC (income tax, VAT), credit cards, utility bills, personal loans, trade creditors. If insufficient to pay all, paid proportionally (pence in the pound)
Loans from spouses or civil partners, interest on ordinary debts
Only paid if any assets remain after all above — in an insolvent estate, this will be nothing
Want to make sure you're doing this right?
Executors are personally liable for errors. In 2 minutes, we'll give you a checklist specific to this estate and flag your risks.
A common misconception is that the deceased's debts pass to family members. They do not. The estate is liable for the debts — not the family. Creditors cannot pursue a surviving spouse, child, or sibling for the deceased's debts unless:
Even the executor is not personally liable for the deceased's debts — their personal liability arises only from breaches of their own duties, not from the existence of estate debts. See our guide on executor personal liability.
An insolvent estate is one of the most challenging situations an executor can face. Professional advice is strongly recommended if:
See our guide on DIY probate vs solicitor costs to understand when professional help is worth the expense.
1 in 3 probate applications are sent back. As executor, the errors are your responsibility.
Answer 5 questions in under 2 minutes. We'll give you a checklist specific to this estate, flag anything that increases your personal risk, and tell you exactly what to do — and in what order.
Free to check · 2 minutes · No account needed · £179 for your full probate pack
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