Recovering debt from an estate

If someone owes you money when they die, what can you do about it? You would be classed as a creditor and you may be able to claim repayment from the deceased person's estate, provided the contractual agreement does not state that the debt becomes void upon the debtor’s death.

To initiate the process of recovering the money which is owed to you, you should promptly contact the personal representative (executor or administrator) of the debtor’s estate, as soon as you learn of their passing. Often, solicitors or personal representatives handling the estate will place a notice in The Gazette and a local newspaper, pursuant to Section 27 of the Trustee Act 1925. This notice typically includes:

• The deceased’s name
• Date of death
• Last known address
• Contact details for the solicitor/personal representative.

Once this notice is published, any creditors with a claim on the deceased’s estate have two months from the notice date to submit their claim to the solicitors or personal representatives.

If a notice hasn’t been published, creditors typically have up to six months from the date of death to notify the personal representative of any debts owed by the estate. If you submit a claim after this period, the personal representative may still consider paying your claim, but if they have already administered the estate in good faith, they are not obligated to settle outstanding debts. Acting promptly is therefore crucial to effectively recovering your debt.

If the personal representatives fail to respond to a creditor’s claim or dispute its validity, a creditor with a debt exceeding £5,000 can petition the Court for an insolvency administration order. This request initiates a process similar to filing a bankruptcy petition and may lead to the appointment of a trustee. When presenting the petition, a deposit of £1,500 and court costs of £332 must be paid.

In some cases, creditors may also have grounds for claims based on anticipatory breach of contract, where there is evidence of the deceased agreeing to repay the debt, or for unjust enrichment, where the deceased financially benefited at the creditor’s expense with no valid reason for such benefit.

If you are a creditor and you want to know how to recover a debt from someone who has died, our specialist team can advise you on your options. Contact us today to find out how we can help.