Is debt passed on after death?

Debts belong to you and you alone, it is not passed on to your family members upon your demise. However in the event that the deceased holds a joint personal loan or mortgage that is co-signed, the surviving party will then have to assumme the deceased’s responsibilities. He or she will have to pay off the debt as the sole debtor.


How will debts be paid off?


Debts do not die with us. They still need to be paid off and usually in order of priority. The executor will have to pay off the debts out of the estate before the remaining assets can be distributed to the beneficiaries.


According to section 57 of the Probate and Adminstration Act [1]there are 2 possible scenarios pertaining to the administration of assets:

  1. If the deceased’s estate is solvent meaning that his assets are more than his liabilities, the executor may use his estate to settle his debts.
  2. If the deceased’s estate is insolvent, his funeral, testamentary and administration expenses shall have priority. Thereafter the order of repayment of debts will be done according to the Bankruptcy Act[2]. The beneficiaries of his estate will not be held legally responsiblt for the repayment of his debts and it is likely that his debts will have to be written off.




Please note:

The information contained in this article is for general guidance on matters of interest only. While we made every attempt to ensure that the information contained herein has been obtained from reliable sources, we are not responsible for any errors or omissions, or for the results obtained from the use of this information. Neither the information presented nor any opnion expressed constitues a solication for the purchase or sale of any financial products. As such, before taking any action you should seek advice from an independent professional advisor.

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