Wills & Probate | Distributing An Estate – What If There Isn’t Enough?

If a deceased person’s liabilities exceed their assets, this is called an insolvent estate.


Well, who gets paid first and who gets paid last?


It is always important to take advice from an insolvency professional, to ensure that the liabilities are paid in accordance with the insolvency laws as, as an Executor, you have a serious responsibility to ensure that monies are distributed correctly.


The order of repayment is as follows:


1. Secured creditors, such as mortgage lenders and secured loans;

2. Funeral expenses;

3. Your expenses, i.e. the person administering the estate;

4. Preferential creditors;

5. Unsecured creditors, such as credit cards or utility companies;

6. Interest due on unsecured loans; and, thereafter

7. Deferred loans, such as family loans.


As mentioned above, it is extremely important that all the assets and liabilities are located.


It is very important that you take advice before distributing any monies when dealing with an insolvent, or suspected insolvent, estate.


The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action.




Emma Aslett

Penn Chambers Solicitors

0207 183 4595