In Summary
  • Many people assume that  if a man or his wife dies,  then the  surviving spouse is responsible for settling the deceased’s debts, which  is not true.
  • As the current owner of the house or mortgaged property  at the time of the death, if no payment plan is made by those inheriting it, the bank can simply sell the property and take the money it was owed, plus the interest accrued.
  • The rest of the money can then be distributed among the beneficiaries  in accordance with the deceased’s wishes.

When a person dies, it usually falls upon family members ones to make crucial financial decisions on their behalf. These  often include settling the deceased’s debts. But thanks to ignorance and misinformation, many people find themselves settling debts that have nothing to do with them.

“Normally, the creditors will learn of  a person’s death through formal channels  or by word of mouth,”  says Dr Jack Mwimali, the dean of Jomo Kenyatta University of Agriculture and Technology’s School of Law.

Thereafter, they  will come forward and make their claims. 

However, the payment of these claims are made against the estate, not the heirs of the property, he says.

“When it comes to succession —whether there is a will or not— the debts owed to the state by the deceased are given priority and, therefore, settled before any others. Even if the property has been left to several heirs, the first priority is to settle the debts owed before sharing out what remains among the beneficiaries,” he says.

Debts come in various forms, including mortgage, medical bills, student loans and even burial expenses. The law stipulates the types of debts that must be given priority. 

“In most cases, the priority debts are hospitalisation and medical bills, and money owed to the government such as the deceased’s tax arrears,” Dr Mwimali says.


“Once the priority debts have been repaid, consideration is given to whether any of the remaining debts was owed to an agency or businesses, and these are settled next. After that it comes down to the normal debts, which are usually the owed to colleagues and friends.”

Dr Mwimali says it is important to note that while the debts are repaid using deductions from the deceased’s estate, there are certain instances, such as inheriting a mortgaged house, when the heir has to deal with the debt hands-on.

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