Debts in a Polish Inheritance: What to Do When the Estate Is in the Red

This guide is general legal information, not legal advice. How the rules apply depends on your individual circumstances, and the matter should be assessed by a qualified Polish lawyer. Twoja Sprawa helps you organise the documents for that assessment.

Inheriting from someone doesn't always mean good news — sometimes, once you start looking into the estate, you discover the person left significant liabilities behind. Debts left by the deceased form part of the estate, and heirs must honour them and pay them off — the extent of that liability depends on whether they accepted the estate outright (full liability) or "with benefit of inventory" (liability capped at the estate's value). These debts might be mortgages, bank loans, unpaid income tax, unpaid VAT, funeral costs, or even credit card balances. Some obligations — such as lifetime annuities or purely personal rights — do not form part of the estate. This article explains which debts count as "estate debts", what your options are when an estate is in debt, and how to deal with creditors.

This article covers Polish law and estates located in Poland. ⚠️ If assets are located in the UK or elsewhere abroad, different rules may apply.

Which debts form part of the estate

Debts that are included (estate liabilities)

Bank loans (mortgages, personal loans, consolidation loans) - These are fully included in the estate. - The creditor is the bank (or whoever it has assigned the debt to). - The heir becomes liable for the outstanding balance.

Private and institutional loans - Fully included in the estate. - The lender is entitled to seek repayment from the estate.

Tax liabilities (unpaid PIT, VAT, CIT) - All outstanding tax liabilities form part of the estate. - Unpaid PIT (personal income tax) from previous years becomes the heir's responsibility. - Unpaid VAT from a business the deceased ran is also an estate debt.

Outstanding ZUS contributions (pension, disability and health insurance) - If the deceased was self-employed (a freelancer or ran a business), any unpaid contributions to ZUS (the Polish Social Insurance Institution) form part of the estate.

Funeral costs and costs of the probate proceedings - Funeral costs are paid out of the estate, usually as a first priority. - Costs of the court or notarial proceedings are also included.

Credit cards and overdrafts - An outstanding credit card balance is an ordinary consumer debt and is included in the estate. - Late-payment interest is included too.

Unpaid maintenance (alimony) - Arrears of maintenance owed to minor children or a former spouse form part of the estate.

Obligations arising from court judgments - If the deceased lost a court case (damages, a fine), that judgment debt forms part of the estate.

Debts that are excluded

Lifetime annuities (life-estate agreements, umowa dożywocia) - Where the deceased was obliged to pay an annuity under a life-estate agreement (umowa dożywocia — a Polish contract exchanging property for lifelong care or payments), that obligation is not included in the estate. - It's a personal obligation that ends on death.

The right to receive maintenance - If the deceased was themselves receiving maintenance, that right ends on their death.

Purely personal rights - Rights that are personal to the deceased — for example, the right to practise as a solicitor, artist or doctor — do not pass to the heirs.

Life insurance with a named beneficiary - If the deceased held a life insurance policy naming a beneficiary (e.g. a child or spouse), the payout does not form part of the estate. - The money goes directly to the beneficiary, bypassing the estate entirely.

⚠️ Important: If the policy names no beneficiary (or simply names "the heirs"), the payout does form part of the estate and is shared among all the heirs.

Working out whether the estate is in debt

The key step is comparing the value of the assets with the amount of the liabilities.

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Example 1: A positive estate - Assets: a house worth PLN 300,000 + a bank account of PLN 50,000 = PLN 350,000. - Debts: a mortgage of PLN 200,000 + unpaid tax of PLN 10,000 = PLN 210,000. - Balance: 350,000 − 210,000 = +PLN 140,000 (positive estate).

→ The heirs receive a net gain once the debts are paid off.

Example 2: A negative estate - Assets: a car worth PLN 30,000 + a bank account of PLN 5,000 = PLN 35,000. - Debts: a personal loan of PLN 60,000 + unpaid tax of PLN 15,000 = PLN 75,000. - Balance: 35,000 − 75,000 = −PLN 40,000 (negative estate).

→ If you accepted the estate outright, you'd have to pay the PLN 40,000 shortfall out of your own pocket. If you accepted with benefit of inventory, creditors are paid proportionally instead — each creditor recovers 35,000 / 75,000 = 46.7% of what they're owed, and the rest is simply written off.

Options for an heir facing a debt-laden estate

Option 1: Renouncing the inheritance

The most clear-cut option — you simply renounce the inheritance and take on none of the debts. The estate then passes to the other heirs or, if there is no one else, to the local municipality (gmina).

Conditions: - Deadline: six months from becoming aware of the inheritance. - Procedure: a declaration to the court or a notary.

More detail: Renouncing an inheritance in Poland: when and how to do it.

Option 2: Accepting with benefit of inventory

If you'd still rather accept the inheritance (say, because the assets are worth having despite the debts), accept with benefit of inventory (z dobrodziejstwem inwentarza) — this caps your liability at the value of the estate.

How it works: - You draw up an inventory listing all assets and liabilities. - The court approves the inventory. - You are liable for the debts only up to the value of the estate. - If the debts exceed that value, creditors each receive the same proportional percentage of what they're owed.

Example: Using the negative estate from Example 2: - Assets: PLN 35,000. - Debts: PLN 75,000. - If you accepted with benefit of inventory, creditors would share the PLN 35,000 between them (each recovering 35,000 / 75,000 = 46.7% of their claim). - You pay nothing further out of your own funds.

More detail: Accepting a Polish inheritance: outright, with inventory, or renouncing it.

Option 3: Accepting outright (unlimited liability)

The riskiest option — you become liable for all the debts without any cap, even if they exceed the value of the assets.

When this makes sense: - When the assets clearly outweigh the debts (e.g. a house worth PLN 500,000 against only PLN 50,000 of debt). - When you're confident you know about every liability and no nasty surprises are likely to surface.

⚠️ Risk: If hidden debts later come to light (unpaid tax, court claims), you're liable for all of them.

Deemed acceptance with benefit of inventory (since 2015): If you do nothing for six months, the law now presumes you've accepted the estate with benefit of inventory (capped liability). This change, introduced in 2015, is very much in heirs' favour.

Mortgages and life insurance cover

Many Polish mortgages come with life insurance attached to the loan — if the borrower dies, the insurer pays off the remaining balance.

How it works: 1. The deceased held a mortgage with life insurance attached. 2. The insurance premium was built into the loan repayments. 3. After death, the family (the named beneficiary or the heir) submits a claim to the insurer. 4. The insurer pays the outstanding mortgage balance to the bank (usually within a few weeks). 5. The estate no longer carries the mortgage debt — only the (now unencumbered) property.

What to do: - Check whether the mortgage had insurance attached (look through the loan documents). - Notify the insurer of the death (typically a letter plus a death certificate and the policy documents). - Wait for confirmation and settlement.

⚠️ Important: Insurance policies sometimes come with conditions (age limits, health requirements) — if the deceased was over 60, the policy may not have covered the full loan amount. Always check the policy's terms.

Dealing with creditors: an heir's obligations

Once you've accepted the estate (especially with benefit of inventory), you need to:

1. Notify creditors

Creditors of the deceased are entitled to know that an heir has taken over the estate. They are usually notified by registered post (particularly banks, tax offices and ZUS).

2. Official notice

In cases accepted with benefit of inventory, the court will typically order a notice calling on creditors to submit their claims, published in: - The Official Journal (Monitor Polski) — nationwide circulation. - A local newspaper — local circulation.

Creditors have four weeks from publication to submit their claims. After that deadline, a creditor who hasn't come forward may find themselves shut out of the estate (though court practice on this varies).

3. Setting a repayment schedule

Where there are many debts and limited assets, the court may: - Appoint an estate administrator (a representative acting for the creditors). - Set a repayment schedule (each creditor receives a percentage of their claim, in order of priority). - Hold a hearing on the division of the estate (where creditors are in dispute with one another).

Order of priority for paying off debts

The law doesn't set out a strict hierarchy in every case, but established court practice follows this order:

  1. Funeral costs (usually paid first out of the estate).
  2. Tax arrears (income tax, VAT, corporation tax).
  3. Outstanding ZUS contributions (social and health insurance).
  4. Maintenance arrears.
  5. Mortgages (usually secured against the property).
  6. Other loans and credit (remaining debts).

⚠️ Note: Although a mortgage sits lower on this list, it carries a mortgage security interest (hipoteka) — a specific charge over the property. If the estate's other assets don't stretch far enough, the bank can still enforce against the mortgaged property directly.

Frequently asked questions

Do I have to pay off the deceased's debts before I get a court decision confirming the inheritance? There's no obligation to do so beforehand — but if creditors submit claims, the court can restrict what you're allowed to do with the assets (for example, selling a house) until the debts are being repaid or negotiated.

What if a creditor threatens to sue? If you accepted the estate with benefit of inventory, your liability is capped at the estate's value. You can ask the court to set a repayment schedule out of the estate. If you accepted outright, you must pay the debt in full (or negotiate terms directly with the creditor).

How do I find out whether the deceased had hidden debts? This can be difficult — you'll need to send enquiries to: - The tax office (Urząd Skarbowy) — for unpaid tax. - ZUS — for unpaid social insurance contributions. - The local district court (Sąd Rejonowy) — for court judgments against the deceased. - Banks — via a credit information check. - Any creditors you're already aware of (credit cards, loans).

Does life insurance form part of the estate? No — provided the deceased named a beneficiary. The money goes directly to that beneficiary. If no beneficiary was named, the payout does form part of the estate.

Can I negotiate repayment terms with creditors? In principle, yes — if the creditors agree (for example, to write off part of the debt or extend the repayment period). That said, it's entirely their decision, not an obligation on their part.

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Disclaimer

Twoja Sprawa is an information platform; we are not a law firm and do not provide legal advice. Every estate needs to be individually assessed by a court, a notary, or a qualified Polish lawyer. This article is for general information only and does not constitute legal advice. If in doubt, consult a regulated professional.

Sources

Last verified: 27 June 2026.

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