Debt after a death

The death of a partner is a traumatic experience for anyone, but more than a third of people find themselves facing debt problems too. This often happens when a deceased person had no life insurance, or when debts have to be paid out of his or her estate.

Some important debt-related facts about the death of a partner are given below but ClearStart also offers a confidential debt advice service to people who are suffering from debt after bereavement. 

Call 0800 988 9345. All of our advice is provided in the strictest confidence.

Inheriting debts after death

English law says that you cannot ‘inherit’ a debt unless you were party to it before the death of the debtor. It means that your own money and property are not directly at risk from a partner’s own debts.

Unfortunately, you can still be affected by someone’s debts after they have died, because these debts are recoverable from his or her estate. The estate cannot be divided amongst the beneficiaries of a will until all debts have been paid.

If all of the money in your spouse’s estate has to be used to settle his or her debts, you could find that you encounter debt problems yourself. In some circumstances you might have to negotiate with the deceased’s creditors to avoid losing your home, for example if it forms part of the estate and could be sold to cover the debts. Remember, however, that you are not responsible for paying your own money towards your spouse’s debts if the value of the estate is not high enough to cover them.

Joint accounts

Although you cannot inherit a partner’s personal debts, the situation is not as simple with a joint credit card or a joint credit agreement, loan or bank account. If someone has died and left behind debts on these items, then you are responsible for them. This is the case even for a credit card you never used yourself: if the card is a joint card then you will be responsible for paying any outstanding balance.