In what order are debts paid after you Die?

What happens if you are sorting out the financial affairs of someone who has died and you suddenly realise there is not enough money to pay all the debts?

First of all, don’t panic. As the executor or administrator, you cannot be held liable. The Government has laid down rules to cover this, similar to the laws of bankruptcy. Secured loans, like mortgages or hire purchase on cars, are first in the pecking order. Then comes the funeral costs and administration fees. And bottom of the pile are things like credit card bills and overdrafts.

Write to all the organisations involved requesting final statements. Monies outstanding should be entered on the probate forms as debts. The value of houses and cars are added as assets.

The funeral is paid for directly from the deceased’s bank account. Lenders normally release money if the funeral director’s bill and a copy of the death certificate are produced. Be aware, though, you are responsible for paying for the funeral if you arranged it.

Other debts are written off if there are insufficient funds to pay the creditors. No one can come after you.

For expert help with the probate process, contact Heritage Will Writing on 02380 879243.