When someone dies, all of their assets (including money, property, shares and insurance payouts) are bundled together and valued as one. This collection is known as the person’s estate.
When an individual makes a will, they’ll name someone to take charge of their affairs after their death: this person is called the ‘executor’. However, if someone has died 'intestate' (without a will), then an ‘administrator’ is appointed to carry out the same duties.
The first task facing these individuals is to pay off outstanding debts from the estate.
These debts must be paid in a certain order. First, mortgages followed by rent arrears; water bills; council tax; fuel; personal loans and credit cards, and finally debts to the Exchequer/Treasury, such as outstanding tax or overpaid benefits.
It is often thought that a surviving spouse or civil partner will automatically ‘inherit’ the deceased individual’s estate, but this is not necessarily the case. Nothing will be/can be paid to the beneficiaries of the will until all of the debts have been cleared.
In some circumstances these debts will be passed to a surviving partner. For example a joint loan (that is in both of your names), or if you acted as a guarantor against a loan taken out in the deceased person’s name. In these circumstances, the responsibility for paying back the money is passed to you.
The Money Advice Service provides a wide range of advice regarding debt and death.
And there is information on the .Gov Website: Debts after death.