Is it obligatory for the heirs, knowing that there is an unpaid debt owed by the deceased, to settle this debt before distributing the inheritance?

Paying off the debt of the deceased is obligatory upon their heirs from the principal of the estate before its division, even if it exhausts the entire estate; this is based on the words of Allah Almighty: "from after any legacy which he may have bequeathed or a debt." So, if the debt is proven against your maternal grandfather and grandmother, their heirs must pay it from the principal of their estate, and they must hasten to do so, because the soul of a believer remains suspended by their debt until it is paid off on their behalf. If the direct heirs do not pay the debt and the money is transferred to those after them, then whoever receives the money must pay the debt. And if those who preceded them have consumed it, then it is to be paid from the estate of the one who consumed it before its division.