Bereavement and debt

When a loved one passes away, this brings not only emotional trauma, but can also lead to financial challenges. If your partner or loved one always handled the family finances, you might find it difficult to manage the new responsibility.  

If you are already feeling overwhelmed, it can be difficult to manage without assistance. Don’t worry, we are here to help you deal with your situation and plan for the future. 

This page will explain the steps you can take to manage your finances during this time. 

Assess your situation 

Collect financial documents  

As soon as you can, go through you and your loved one’s documents to get a picture of the finances and check who needs to be contacted, for example, a life insurance company. If household bill accounts are in your loved one’s name, you will need to change these into your own name. 

Check your finances 

Use our free My Full Financial Picture tool to understand how much is coming in and where it is going. When we think about money, often it is the weekly or monthly costs that spring to mind. It can be so easy to forget the one-off costs or the small items that add up fast.  

You need to get a clear picture of your finances to help you see where you need to make changes. It doesn’t have to be perfect, so just give it a try. 

Take your time making major financial decisions 

Don’t rush into making big decisions about your finances. For example, if you get an insurance settlement, place it in a bank until you have enough time to look at your options. If you must make a major financial decision, try to get independent legal or financial advice. 

Make a budget 

Use our free My Budget tool to see how much money you have coming in and going out. This will help you to see where your biggest costs are, where you can cut back and how much you can save. 

How to manage bills, debts and loans 

If you are named on a credit agreement like a personal loan or bill, you will be responsible for repaying the full amount of the debt. If you’re not able to make all the repayments, you should take the following three steps: 

1. Make a list of all your arrears (payments you are behind on), loan repayments and credit debts. 
2. Prioritise your debts by splitting them into two categories, priority debts (rent, mortgage, electricity, gas) and secondary debts (unsecured debts such as a personal loan). 
3. Use the My Budget tool to see how much you have left after your priority debts are paid. 

Once you know how much you can afford to pay, contact your creditors (people you owe money to) to explain your situation and arrange a repayment plan. MABS can help you to arrange a repayment plan if you need help. 

What to do if you miss payments and don’t contact creditors 

If you don’t pay the minimum payment, or contact your creditors to arrange a repayment plan, your account will go into arrears.

Three steps will happen after you go into arrears:

1. Your lender will contact you and ask you to pay the missing payments
2. If you don’t make the payments, the account will default
3. They’ll send you a default notice asking for payment 

In most cases, if they don’t hear from you after the default notice, they will try to recover the debt through the courts. 

Creditors must follow certain rules when dealing with arrears which are in the Central Bank of Ireland’s Consumer Protection Code (pdf) (Chapter 8 Arrears Handling). 

If the bills or loans were in your loved one’s name only 

If your deceased loved one had a bill or loan (debts) that was only in their name, you won’t have to pay it. These debts will either: 

• Be written off if the person didn’t have any assets or 
• Need to be repaid if the person has left an estate (see below) 

A person’s estate is made up of their money, investments, any property they own (or jointly own) and their possessions. The estate also includes money paid from insurance companies. 

If they left a will, any beneficiaries (someone entitled to receive money in the will) will only get their money after debts have been repaid from the estate. You can read more about dealing with a deceased person’s estate. 

Financial supports after a death 

If your income falls after the death of a loved one, you may struggle to pay some bills or loans. It’s a good idea to do the following to see if there is financial help available. 

Check your social welfare entitlements 

The Department of Social Protection (DSP) has different benefits and entitlements to help you during this difficult time. For example, you may be able to get help with the cost of the funeral or paying your rent if you are struggling.  

Contact Revenue (Tax Office) 

Following the death of a spouse, you should contact Revenue to tell them your situation, so that they can arrange for you to get the right tax credits. There are also rules about taxation in the year of a person’s death, for example, a tax refund may be due. 

Contact your bank  

Some banks have arrangements in place to help pay for the funeral from the deceased person’s account. You should contact the bank directly to find out more. Read more on access to money after a death. 

Contact your insurance company 

Check any insurance policies you have, or that your spouse or loved one had, and how they affect your new financial situation. The insurance policy may pay an amount to certain people after death. 

Citizens Information’s bereavement guide (pdf) has a full list of financial supports available. 

Contact MABS for help 

 Whatever way you decide to tackle your debt, MABS can help you.  

If you have financial difficulties following a bereavement, it is important to deal with these at an early stage as ignoring the problem will only lead to matters getting worse.