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Do personal debts die with you?

Sharon McDougall - Updated - 2nd May 2024 - 3 minutes to read

What happens to personal debts after death?

When you die, your debts will be paid from your estate unless they were taken out in joint names, in which case the other person takes on liability for the full amount outstanding. If borrowing is in your sole name, liability does not pass to your partner or family unless they were guarantors.

In the case of a mortgage, there should be a life insurance policy to cover the outstanding amount on death. Should you have no estate, however, your debts will be automatically written off as there is no money with which to repay them, and your family are not liable.

What might your estate comprise?

It is the responsibility of your executor or administrator to make sure that all debts are cleared before any other claims are made on the estate. Executors are generally family members and/or solicitors, but if relatives are the only executors it is vital that they seek legal guidance if the estate is insolvent.

Responsibility for liaising with financial institutions and arranging repayments lies with the executors. When debts are present, they form a ‘hierarchy’ and have to be repaid in a specific order.

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What is an insolvent estate?

Your estate will be deemed insolvent if there are insufficient assets to pay your funeral expenses and debts. Outstanding liabilities within insolvent estates in Scotland should be repaid in the following order:

  • Expenses of the Trustee
  • Funeral and testamentary expenses associated with administering the estate
  • Preferred debts,
  • ‘Ordinary’ debts, including unsecured debtors such as credit card and store card providers

There may be enough assets within an estate to pay some, but not all, of these expenses. In these cases, any remaining unpaid debts will be written off. Provisions made for beneficiaries within a will no longer apply if the estate is insolvent, which should be administered in accordance with legislation laid down in the Bankruptcy (Scotland) Acts.

What happens to the debts to be repaid?

Each category of debt within this hierarchy has to be cleared in total before moving on to the next one.

In general, when you die your debts will either be repaid from your estate or are written off. Your family do not become liable at any stage unless they are party to a loan or have provided a personal guarantee, in which case they will become liable for the whole outstanding amount.

Scotland Debt Solutions provides professional debt advice to anyone living in Scotland. We have five offices around the country, and offer same day meetings free of charge.

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Sharon McDougall


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