When someone dies, debts are recoverable from any assets or money left in the deceased's estate. No one else is required to pay for the debts unless they are already liable under the terms of the original agreement (e.g., the debt is in joint names of someone who has signed as a guarantor or has Power of Attorney).
- Debts may be incurred with regards to:
Debts must be settled before an executor can distribute any of the estate to the beneficiaries.
The executor must give 6 months for creditors to make claims before distributing the estate, otherwise the executor may be legally liable for unpaid debts.
If the debts are greater than the assets of the estate, the executor should seek legal advice, as there are complicated rules for paying out what assets there are to various creditors.
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