When someone dies, they may leave behind debts. These are paid out of the estate left by the person who passed away. The estate is essentially the value of everything the deceased leaves behind when they die. The executor – the person responsible for handling the deceased’s estate – will normally use any assets from the estate to pay off the debts. They’ll need to apply for probate, which is the legal right to deal with the deceased’s estate, before they can pay off the debts. They must also estimate the value of the estate before anything else is done, in case inheritance tax needs to be paid.
If there isn’t enough money in the estate to pay off all the debts, the debts will likely be prioritised so the largest are paid off first. Once the money runs out, any remaining debts will typically be written off.
The time after a bereavement can be difficult, especially if you’re also having to deal with a whole heap of debts left behind. Find out what happens to debts when someone dies and who is responsible for paying them off in the latest of our series of Guides provided by UK price comparison website Comparethemarket:
Debt After Death – a Complete Guide
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