Debts of the deceased: who pays?

Last reviewed 18 August 2026

A common dread among the bereaved is that a parent’s debts will fall upon the children. They do not — but the executor must settle them from the estate with care, and in the proper order.

Debts fall on the estate, not the family

Debts are paid out of the estate, not by relatives personally (unless they were jointly liable, as with a joint loan). If the estate cannot cover its debts, it is insolvent, and the debts are paid as far as the assets allow, in a set order — beyond that, they die with the person. No beneficiary inherits until the debts are paid.

The order of payment

Executors must pay in the correct order: secured debts and reasonable funeral expenses first, then testamentary and administration expenses, then unsecured debts, and only then the beneficiaries. Paying a beneficiary before a creditor can make the executor personally liable. To guard against unknown creditors, executors can place a statutory advertisement (a “Section 27 notice”) before distributing.

Sources. GOV.UK, Dealing with debts of someone who has died; Administration of Estates Act 1925 (order of payment); Trustee Act 1925 s.27 (creditor notices); Insolvency rules.