Coping with debt after your partner dies

It's difficult to think about practical matters after the death of a partner. It can be even more daunting when you have debts to deal with at the same time.

You may like to watch our animation video below for information on coping with debt after your partner dies.

Talk to the companies you owe money to

Your first step should be to talk to the companies, your local council or anyone else you owe money to. Let them know your situation and what you can afford to pay them. If you don’t feel confident doing this on your own, any of the free, independent debt advice agencies will help (see below).

The companies and organisations you owe money to might agree to temporarily freeze the interest you’re being charged or even lower or pause the repayments.

Find out more about how to talk to the people you owe money to

Use the letter template below to write to the companies you owe money to, to notify them if you are concerned about making your payments due to the death of a partner and to request a temporary change in your payments.

Download letter template (DOC)

Debt repayment options

There are a number of debt repayment options open to you, including:

  • An informal arrangement – where you agree to make regular payments over a period of time to your creditors
  • A debt management plan – which sets out how much you will repay and agrees a timetable for repayment
  • Moving all your current debts into one loan – this is called debt consolidation

Worried about your rent or mortgage?

It can be particularly worrying when you are struggling to keep up with your mortgage or rent payments.

  • If you own your home, contact your mortgage lender and ask them what options are open to you. You could ask them to temporarily freeze your mortgage, known as a mortgage payment holiday. There are some things to be aware of before you do this – read Mortgage payment holidays.
  • If you’re renting, let your landlord know if you think you’ll fall behind with your rent at any point – you don’t want to risk eviction for non-payment – so it’s best to be upfront about your situation. See if you can negotiate a lower rent for a short while.
  • You could take in a lodger if you have space. You're allowed to receive up to £4,250 a year rent, tax free, from letting out a spare room. Read more in Rent a Room scheme – how it works and tax rules.
  • You could also think about moving to a smaller home to save on your rent or mortgage. If you own your home, the sale might also free up some extra cash.
  • If you have a family member that you could move in with, even temporarily, that might also be very helpful, although it also has downsides for both parties.
  • If you are renting, check whether you are eligible to claim Housing Benefit. Find out more on the GOV.UK website.
  • If you own your home, you may also be eligible for government help, which you can read about in Government help if you can’t pay your mortgage.
  • For more detail on your options, read Mortgage arrears: if you have problems paying your mortgage or Problems paying your rent.
  • If you’re worried that you might be made homeless, you need to get expert advice – visit the Shelter website or call them on 0808 800 4444.

If you can't pay all your debts and bills

If you're unable to meet all your bills and debt repayments, you should prioritise what you pay for. Start by being clear which of your debts are priorities.

Priority debts

Things like your mortgage, rent, any other secured loans (such as a car hire-purchase agreement) and any tax and some utility bills are classed as priority debts. Failure to pay these debts could have serious consequences – you could lose your home or be evicted, have your electricity or gas cut off, or have essential items (such as your car) repossessed.

Non-priority debts

Things like credit card bills, unsecured loans, bank overdrafts and catalogue debts are classed as non-priority debts. The consequences for non-payment of these aren’t quite as great. The companies you owe can’t take your home, for example, but you could be taken to court and ordered to pay an amount that is judged to be affordable from the income that you have.

Always give priority to your mortgage/rent and household bills. Your credit card company may be quicker to remind you of a missed payment, but don’t be tempted to take risks with the roof over your head.

Where to get free help

There are sources of free, independent advice if you’re struggling to pay your bills and manage your debts. They can support you in talking to and writing to lenders and can offer you a personalised debt plan. Or, they can suggest other options if they are more appropriate.

If you want help managing your debts, try contacting the following organisations.

Citizens Advice Bureau (England and Wales)

Citizens Advice Bureau (Northern Ireland)

Citizens Advice Scotland

National Debtline

StepChange Debt Charity

 

Money Advice Service

This article is provided by the Money Advice Service. All information accurate at time of publication.