What happens to credit card debt when you die?
Written by
Emily Tye
Reviewed by
Amy LancashireIn the UK, credit card debt doesn't pass to your family when you die. It's paid from the money and property you leave behind, known as your estate, before anyone inherits. If your estate can't cover it, nobody else has to pay what's left, unless they guaranteed the debt or were jointly responsible for it.
Most of this applies wherever you live in the UK. Where the rules differ between England and Wales, Scotland and Northern Ireland, we say so.
Does credit card debt die with you?
Not exactly. The debt doesn't disappear, but it doesn't pass to anyone else either. It becomes a debt of the estate, which is everything the person owned, such as savings, property and possessions.
The person dealing with the estate pays it. That's usually the executor named in the will. If there isn't a will, someone else takes on the role: an administrator in England, Wales and Northern Ireland, or an ‘executor-dative’ appointed by the court in Scotland. We call them all executors in this guide.
Wherever the person lived, the executor has to pay the estate's debts before sharing anything out.
So credit card debt can reduce what family members inherit, but it doesn't come out of their own pockets.
Am I responsible for my partner's or parent's credit card debt?
Not just because you were related, married, in a civil partnership or living together. A credit card agreement is between the card provider and the person who signed it.
There are two situations where you could be asked to pay:
You were a guarantor. If you signed a guarantee for their borrowing, the lender can ask you to pay if the estate can't.
The debt was in joint names. UK providers don't offer joint credit cards, so this is more likely to apply to a joint loan.
If you were an additional cardholder on their account, you aren't responsible for the balance.
What happens if there isn't enough money in the estate?
If the debts add up to more than the estate is worth, the estate is insolvent, and the executor has to pay creditors in an order set by law.
England and Wales, Scotland and Northern Ireland each have their own law on this, but the order is broadly the same. In simplified form, it's:
Secured debts, such as a mortgage, which are paid from the asset they're secured on
Reasonable funeral costs and the costs of dealing with the estate
Preferential debts, a short list of debts given priority by law
Unsecured debts, including credit cards, personal loans and overdrafts
Unsecured debts rank equally with each other. If there isn't enough to pay them all, each creditor gets the same share of what it's owed, for example 40p for every £1.
In Scotland, this order only applies once the estate is formally sequestrated (Scotland’s form of bankruptcy), not as soon as it’s insolvent. The executor can apply for sequestration through the Accountant in Bankruptcy.
In every part of the UK, anything left unpaid stays unpaid, and family members don't have to cover it.
In England, Wales and Northern Ireland, an executor who pays a debt in full, then finds there isn’t enough money to go round, won’t have to make up the shortfall to other creditors of the same type, as long as they had no reason at the time to think the estate was insolvent. If they did have reason to think so, they can be personally liable. Wherever the person lived, it’s worth getting free advice before paying anyone if the money might not stretch.
What should I do if I'm dealing with someone's credit card debt?
Tell the card provider. It's worth having a copy of the death certificate to hand, as the provider may ask for it. The free Death Notification Service lets you tell several member banks and building societies at once.
Ask about the balance and the account. Check the balance, whether credit card interest and charges are still being added, and what happens to any additional cards. Regular payments on the card, such as subscriptions, are usually continuous payment authorities, and you can ask the provider to stop them.
Look for insurance. Check the paperwork for any cover that could pay off the balance, such as life insurance.
Give other creditors time to come forward. In England and Wales, executors can place a notice in The Gazette, and in a local newspaper if the estate includes a house or land, giving creditors at least 2 months to claim. Once the deadline passes, section 27 of the Trustee Act 1925 protects them from claims they didn't know about. Northern Ireland works the same way under section 28 of the Trustee Act (Northern Ireland) 1958, with notices in the Belfast Gazette and local newspapers. In Scotland, the executor must give creditors 6 months to claim before sharing out the estate, according to Scottish Government guidance. Across the UK, an executor who shares out the estate too early may have to pay a debt themselves.
Get free advice if the debts might be more than the estate. StepChange gives free, confidential debt advice across the UK, and the MoneyHelper debt advice locator can find other free services wherever you live.
FAQs
Will their credit card debt affect my credit score?
Not directly. Their card debt won’t show on your credit file. But if you shared finances, such as a joint bank account or a joint loan, your files are linked, so lenders may look at their history when you apply for credit. You can ask the credit reference agencies to remove that link. Being married or living together doesn’t create one on its own.
Does life insurance pay off credit card debt?
It can. If a life insurance policy pays out into the estate, that money can be used to pay the estate's debts, including credit cards. A policy written in trust usually pays out to the people named in the trust instead, so it doesn't form part of the estate.
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
