Hierarchy of debts
The priority for payment of unsecured debts becomes relevant when there are insufficient funds in the deceased’s estate to cover all outstanding debts.
The order of priority for payment of debts on death in Scotland is as follows.
1•Deathbed, funeral and administration expenses from the deceased’s estates are ‘privileged debts’ and are payable before all other debts.
•‘Preferred debts’ will be paid next. This will include contributions to pension schemes and payments owed to the deceased’s employees, if applicable.
•‘Ordinary debts’ are paid finally. These are all other debts which are not secured.