A frequent misconception is that when a person dies, their debts do too.
Others wrongly assume that the deceased’s immediate family will be responsible for paying off any outstanding obligations.
In actuality, the deceased person’s estate is responsible for paying off all of their debts as of the date of death.
By “estate,” we imply the sum total of a deceased person’s assets, including money, property, and other valuables. If sufficient funds are on hand, all outstanding debts will be paid using these assets.
However, if the decedent’s obligations exceed the value of their estate, the assets must be distributed to creditors in a certain order before the remainder is distributed.
Creditors are listed in order of priority which must be followed as such:
- Secured Creditors e.g.: an outstanding mortgage
- Priority Debts: Council Tax etc.
- Unsecured debts: utility bills etc
After a person’s death, anyone who co-signed on any debts with them, such as a spouse, becomes fully responsible for paying off the obligation.
When dealing with the estate of a deceased loved one, it’s not uncommon for the situation to become more complicated than expected, coming at a time when you’re already fighting to come to terms with your loss. To help you through the estate administration procedure, we are here to offer our skilled legal guidance and steer you clear of potential pitfalls.
