Does the family have to pay a deceased person's debts in Australia?

The short answer is no. In Australia, you cannot be responsible for someone else's debts when they die. Debts belong to the deceased person, and their assets must be applied in a strict order: funeral costs first, then administration expenses, secured debts like mortgages, and finally unsecured debts such as credit cards and unsecured loans to friends and family. If the estate runs completely out of money, it is declared insolvent and the remaining debts are written off. The exceptions are debts held jointly with another person, or debts that another person guaranteed the deceased would repay.