diff --git a/app/database.py b/app/database.py
index 3544f94..b11b626 100644
--- a/app/database.py
+++ b/app/database.py
@@ -116,7 +116,7 @@ class Database:
     def get_contacts(self) -> List[Dict]:
         with self._connect() as conn:
             rows = conn.execute(
-                "SELECT * FROM contacts ORDER BY last_seen DESC"
+                "SELECT * FROM contacts WHERE source != 'deleted' ORDER BY last_seen DESC"
             ).fetchall()
             return [dict(r) for r in rows]
 
@@ -147,9 +147,14 @@ class Database:
             return dict(row) if row else None
 
     def delete_contact(self, public_key: str) -> bool:
+        """Soft-delete: mark as 'deleted' instead of removing.
+
+        Keeps the row so FK references in direct_messages stay intact.
+        upsert_contact() overwrites source on re-add, auto-undeleting.
+        """
         with self._connect() as conn:
             cursor = conn.execute(
-                "DELETE FROM contacts WHERE public_key = ?",
+                "UPDATE contacts SET source = 'deleted', lastmod = datetime('now') WHERE public_key = ?",
                 (public_key.lower(),)
             )
             return cursor.rowcount > 0
diff --git a/app/device_manager.py b/app/device_manager.py
index 4e5d4d2..7798578 100644
--- a/app/device_manager.py
+++ b/app/device_manager.py
@@ -1000,14 +1000,13 @@ class DeviceManager:
             return self.db.get_contacts()  # return cached
 
     def delete_contact(self, pubkey: str) -> Dict:
-        """Delete a contact from device. Keep DB record to preserve DM history."""
+        """Delete a contact from device and soft-delete in database."""
         if not self.is_connected:
             return {'success': False, 'error': 'Device not connected'}
 
         try:
             self.execute(self.mc.commands.remove_contact(pubkey))
-            # Don't delete from DB — ON DELETE SET NULL would orphan all DMs.
-            # Contact stays in DB for historical reference; upsert updates on re-add.
+            self.db.delete_contact(pubkey)  # soft-delete: sets source='deleted'
             # Also remove from in-memory contacts cache
             if self.mc.contacts and pubkey in self.mc.contacts:
                 del self.mc.contacts[pubkey]