Dealing with the donor's debts
Guidance from Estate Advisory Group
Written and legally reviewed by Ramani Gill TEP, Solicitor and private client practitioner·Last reviewed 13 August 2026
Attorneys inherit the post. Debts must be dealt with in the donor's interests, in the right order.
Priority order
- Care fees, rent or mortgage, council tax, energy — anything that risks the donor's home or care.
- Court fines and arrears with enforcement powers.
- Unsecured credit: cards, loans, catalogues.
- Family loans, which are last and need particular care because of the conflict.
Worked example: Mo becomes attorney for his aunt Beryl after a stroke and finds a stack of unopened post: two credit card statements, a council tax reminder, and a letter from her energy supplier about a missed direct debit. He deals with the council tax and energy accounts first because non-payment risks enforcement action and disconnection, brings the direct debit up to date, and only then turns to the credit cards, where he writes to each provider enclosing the LPA and asking them to freeze interest while he works out an affordable repayment plan from Beryl's pension income.
Tell creditors about the capacity position
Send a copy of the LPA and, where you have it, medical evidence of the donor's condition. Most lenders have a mental health policy and will freeze interest, stop collection activity, and in some cases write off small balances. Use the Money and Mental Health evidence form if the GP will complete it.
What creditors can and cannot do once they know about the LPA
| Creditor action | Still allowed | Usually stops or is adjusted |
|---|---|---|
| Sending statements | Yes, to the attorney | — |
| Charging default interest | — | Often frozen once notified |
| Passing the debt to collections | — | Usually paused while an arrangement is discussed |
| Court action for a large secured debt | Possible in serious cases | Usually a last resort once an attorney engages |
Where to get help
Free advice exists and is better than ours
StepChange, National Debtline and Citizens Advice all deal with attorneys acting for someone else, free of charge. Bankruptcy or a debt relief order for the donor should only be considered with that advice.
Keeping the donor's interests separate from the family's
It can be tempting to settle a family loan first because it feels awkward to chase a relative, or to let an unsecured card slide because "they've always paid it eventually." Decide the order by risk to the donor, not by who is asking loudest, and write down your reasoning. If you are also a creditor of the donor yourself — for example you lent them money years ago — treat that debt with particular caution and consider getting independent advice before deciding how, or whether, to repay yourself; see conflict of interest.
Common questions
Am I personally liable for the donor's debts?
No, provided you act within your authority and keep the donor's money separate from yours.
Can I stop paying a debt I think is wrong?
Dispute it in writing rather than simply stopping payment, and record your reasoning.
Can I negotiate a full and final settlement?
Yes, if it is clearly in the donor's interests and you keep a record of the offer, the amount accepted and why.
What if the donor's debts exceed their assets?
Get free debt advice before taking any formal insolvency step — an attorney should not commit the donor to bankruptcy or a debt relief order without it.
Read next
Where this fits
This page is part of Money, tax and property. The pages below take it further.
- Property & Financial Affairs LPA
The LP1F: money, bills, savings, property and everything a bank will ask for.
- Make an LPA online
The whole journey end to end: questions, documents, signing and registration.
Review and sources
Reviewed by Ramani Gill TEP, Solicitor and private client practitioner. Last reviewed 13 August 2026. We recheck fees, forms and Office of the Public Guardian guidance whenever they change — see our editorial policy.
Official sources
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The Office of the Public Guardian charges a separate £92 to register each LPA.
This is general information about how Lasting Powers of Attorney work in England and Wales. It is not legal advice about your situation. What we do and do not do.
Published by Estate Advisory Group