When someone dies in the UK, their debts are paid out of their estate: the money, property and possessions they leave behind. Family members do not inherit debts and do not have to pay them from their own money, unless they were a joint borrower or a guarantor. If the estate is not big enough to pay everything, it is insolvent, and debts in the person's sole name that cannot be paid are usually written off. Some debts, such as student loans, are cancelled outright.
This guide explains how each type of debt is treated, what executors need to do, and what to say if a lender contacts you. It focuses on England and Wales; the principles are similar in Scotland and Northern Ireland but the legal process differs.
Who is responsible for a dead person's debts?
The estate is responsible, and the executor (named in the will) or administrator (if there is no will) deals with it. They gather in the assets, pay the debts and costs, and only then share out what is left. Nobody else is liable for debts in the deceased's sole name. If creditors cannot be paid from the estate, they cannot recover the shortfall from relatives.
There are three main exceptions where someone else may have to pay: joint debts, debts with a guarantor, and some household bills for a property you lived in with the person, such as council tax or water for the period after death.
How different debts are treated
| Debt | What usually happens |
|---|---|
| Credit cards, loans, overdrafts in sole name | Paid from the estate; written off if the estate runs out |
| Joint loans, joint overdrafts | Surviving borrower becomes liable for the whole debt |
| Guarantor loans | Guarantor may have to pay if the estate cannot |
| Mortgage | Repaid from the estate or a property sale, by an insurance policy, or taken over by the heir |
| Car finance (HP or PCP) | Settled from the estate or the car is returned |
| Student loan | Cancelled by the Student Loans Company |
| Council tax, energy bills | Estate pays up to the date of death |
| Benefit overpayments | DWP can recover from the estate |
| Buy now, pay later | Paid from the estate like other unsecured credit |
To cancel a student loan, send the Student Loans Company a copy of the death certificate and the person's customer reference number if you have it.
What is not usually part of the estate
Some money passes outside the estate, so it is not normally available to pay debts:
- Money in joint bank accounts, which passes straight to the surviving account holder.
- Property owned as joint tenants, which passes automatically to the surviving owner. Property owned as tenants in common is different: the deceased's share forms part of the estate.
- Life insurance written in trust, which is paid directly to the beneficiaries.
- Most workplace and personal pension death benefits, which the scheme pays at its discretion to the people you nominated.
- Payment protection or mortgage protection insurance may pay off a specific debt, so check for policies before paying anything.
What executors need to do
Our financial checklist for when someone dies covers the wider admin, and our guide to probate costs explains when probate is needed and what it costs.
- Find all financial paperwork and list every debt, asset and regular payment. Write to each creditor with a copy of the death certificate and ask for a final statement.
- Ask creditors to freeze interest and charges while the estate is dealt with. Many will.
- Place a deceased estates notice in The Gazette and a local newspaper. This gives unknown creditors a set period to come forward, usually two months, and protects you if a creditor appears after the estate has been shared out.
- Pay debts, funeral costs and administration expenses before giving anything to beneficiaries. Sharing out the estate first can leave you personally liable.
- Do not pay any debts from your own money.
- If debts may exceed assets, stop and get advice from a solicitor before paying anyone.
If the estate cannot pay all the debts
An estate is insolvent when its debts and costs are more than its assets. In that case there is a legal order of payment, and executors must follow it. Broadly:
- Secured debts, such as a mortgage, are paid from the asset they are secured on.
- Funeral expenses and the costs of dealing with the estate.
- Preferential debts, which are uncommon for individuals.
- Ordinary unsecured debts such as credit cards, loans and utility arrears, shared out proportionately if there is not enough for all.
Whatever is left unpaid at the end is written off; beneficiaries receive nothing, but they do not inherit the shortfall either. Paying one creditor in full while others get nothing can make the executor personally liable, which is why advice is so important here. An insolvent estate may not even need probate.
If a lender asks you to pay
If you were not a joint borrower or guarantor, you are not liable, and you can say so in writing. Lenders regulated by the FCA must not pressure or mislead relatives into paying debts they do not owe. Do not agree to pay anything "to settle things" until you know who is legally responsible. If you are unsure, free advisers such as Citizens Advice, StepChange and National Debtline can help.
To reduce marketing post and the risk of identity fraud, register the death with the Bereavement Register and the Deceased Preference Service, and use the government's Tell Us Once service, where available, to inform HMRC, DWP and other public bodies in one go.
Protecting your family from your own debts
- Write a will so your executor is someone you trust. See our guide to writing a will for free.
- Consider life insurance written in trust if someone depends on your income or would struggle with a joint mortgage.
- Keep your pension nomination forms up to date.
- Avoid joint borrowing or guarantor arrangements you would not want a partner or relative to carry alone.
- Keep a simple list of your accounts and debts somewhere your executor can find it. The net worth calculator is a quick way to see assets and debts side by side.
- Build savings so that funeral costs and final bills do not fall on family. A small amount set aside each day with SYM adds up; track a target with the savings goal calculator.
Frequently asked questions
Do I have to pay my parents' debts when they die?
What happens to credit card debt when you die?
Are student loans written off when you die?
What happens to a joint mortgage when one person dies?
Can creditors take money from a joint bank account after a death?
How long do creditors have to claim against an estate?
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