We are sometimes asked by Executors or Administrators of an estate what would happen if the deceased person had accrued more debts than assets in their lifetime in estates in England and Wales. Do the debts die with the deceased? Our Amye Aris, Head of Wills and Probate at New Leaf Solicitors, explains more below.

WHEN WILL AN ESTATE BE DEEMED INSOLVENT?

If a deceased person left more debts (liabilities) than total assets in their estate (so that there’s not enough liquid assets to pay debts accrued) this would be classified as an insolvent estate.

 If this is the case, Executors need to pay creditors in a certain order as set down in law. Correct procedures must be followed, otherwise the Executors or Personal Administrators could be held personally responsible for any mistakes made or paying creditors in the incorrect order.

WHAT IS THE