If you've just been handed an estate with credit card statements, a car loan, and a mortgage in the pile, take a breath. Here is the single most important thing to know, and almost nobody tells families this clearly:

The debts belong to the estate — not to you, and not to the family.

In British Columbia, when someone dies, their debts don't transfer to their spouse, their children, or their executor. Debts are paid out of the money and property the person left behind (the estate). If the estate runs out, most remaining debts simply go unpaid — the family does not inherit them. Canada has no rule that makes relatives responsible for a deceased person's own debts.

There are only three common exceptions:

  1. Co-signed or guaranteed debts. If someone co-signed a loan or guaranteed a credit line, that person owes the debt in their own right. It was always partly theirs.
  2. Joint debts. A joint credit card or joint line of credit survives with the other account holder (this works like joint bank accounts, but in reverse).
  3. Secured debts on something a beneficiary keeps. A mortgage or car loan is attached to the house or car. Whoever keeps the asset either takes over the payments or the asset is sold to pay the loan — see what happens to a mortgage when someone dies.

Everything below is the practical version of "the estate pays": how to find the debts, what to tell creditors, what order to pay in, and the two inexpensive protections that keep an executor from ever paying out of their own pocket.

(One thing before we start: supplementary credit cards — a second card on someone else's account — are usually not the supplementary holder's debt. Check the cardholder agreement, but in most cases only the primary account holder's estate owes the balance.)

First: don't pay anything yet

The instinct in the first week is to "get things settled" — pay off the Visa, clear the utility bill, tidy up. Don't. Paying debts is a middle-of-the-process job, not a first-week job, and paying too early (or in the wrong order) is one of the few ways an executor can end up personally liable.

What to do instead in the first couple of weeks:

If you want the full week-one picture beyond debts, it's here: the executor's first week.

Step 1 — Find every debt

You can't settle what you can't see, and debts have a way of hiding (paperless billing is an executor's enemy). Four searches will surface almost everything:

1. Redirect the mail. Statements will come to the deceased's address for months. Canada Post will forward a deceased person's mail to you: go to any post office (or use their website) and bring (a) the death certificate — a funeral director's certificate also works, (b) proof you're the legal representative, and (c) your own ID. If you don't have the probate grant yet, ask for Canada Post's Statutory Declaration form 40-076-696 — it's exactly for executors who haven't been to court yet. You swear it before a notary or commissioner and it stands in for the grant. There's a fee for forwarding (it's a standard Mail Forwarding purchase — a modest cost, reimbursable from the estate).

2. Pull their credit reports — from both bureaus. This is the closest thing to an official list of debts, and it also flags the file so nobody can fraudulently borrow in the deceased's name. Canada has two bureaus and they don't talk to each other, so do both:

Both bureaus will also mark the file "deceased," which protects the estate from identity fraud — worth doing even if you think you know every debt.

3. Ask the CRA. Taxes are almost always the largest single "debt" nobody has a statement for. Call the CRA's individual line (1-800-959-8281), tell them you're the executor, and send them the death certificate and will so they'll talk to you; once registered you can see balances owing and missing returns. (What actually gets taxed at death is usually capital gains, not an inheritance tax — that's explained here.)

4. Check the property. If there's real estate, a title search at the Land Title Survey Authority (myLTSA, or any registry agent — about $10–$20) shows every mortgage, line of credit, and lien registered against the property, including ones the family forgot existed.

Step 2 — Tell each creditor, and ask three questions

Once you have the list, call or write to each lender. The script is short:

"I'm the executor of the estate of [name], who died on [date]. I'm notifying you of the death. Please freeze the account, stop any further interest and fees if your policy allows, and send a final statement of the balance to the estate at [address]."

Then ask three questions, in this order:

  1. "Does this account carry balance protection or creditor insurance?" Mortgages, credit cards, car loans, and lines of credit are often sold with insurance that pays the balance off at death — and lenders will rarely volunteer this. If the answer is yes, ask for the claim form. This one question sometimes erases the largest debt in the estate.
  2. "What do you need from me?" Usually the death certificate and, later, the grant of probate. Send copies, never originals.
  3. "Where do I send claims correspondence?" Get an address and a reference number, and keep everything in one folder — you'll want a clean paper trail when you account to the beneficiaries.

Creditors will keep sending statements. That's fine. A debt sitting frozen while you work through probate is normal and hurts no one — interest may accrue, but no collector can force payment from anyone but the estate.

Step 3 — Pay in the right order (and know when to stop)

If the estate is clearly solvent — the assets comfortably cover everything — the order barely matters. Once the estate account is set up (usually after the grant), pay debts as they come due, keep every receipt and statement, and hold enough back for the final tax bill before anyone inherits. The broad sequence is: funeral and administration costs, then everything else, with taxes squared away before final distribution. That last part matters enough that it has its own safeguard — before you distribute the remaining money, you can ask CRA for a clearance certificate, which confirms all tax is paid and closes off the one debt that can otherwise come back to you personally. It's a standard step on the full executor's checklist.

If the estate might not cover everything — stop. Don't pay anyone yet, not even sympathetic creditors, and especially not one credit card in full because the collector was persistent. BC law (the Wills, Estates and Succession Act, Division 12) sets a strict order for insolvent estates: reasonable funeral costs and the expenses of administering the estate come first, secured lenders take the assets they're secured against, and everyone else shares what's left proportionately — no favourites allowed. An executor who pays the wrong creditor first, and then runs out, can be personally responsible for the difference. This is the one moment in the debts process where a one-hour consult with a probate lawyer pays for itself many times over; if the estate is deeply insolvent and you haven't started acting yet, a lawyer may also tell you that you can decline the role entirely — which you can only do before you start handling estate property.

The $70 shield: publishing a Notice to Creditors

Here's the executor's nightmare: you settle every debt you know about, distribute the estate to the family, and six months later a creditor surfaces with a loan nobody had heard of. Without protection, you could be paying that claim yourself.

BC law gives you a remarkably cheap shield. Under section 154 of the Wills, Estates and Succession Act, an executor can publish a Notice to Creditors in the BC Gazette — the province's official record. The notice names the estate, gives your (or your lawyer's) mailing address, and sets a deadline for claims that must be at least 30 days after publication. Once that deadline passes, you can distribute the estate honouring only the claims you actually know about — and if an unknown creditor appears later, they can chase whoever received the money, but they cannot make you pay personally.

Doing it is genuinely simple, and you don't need a lawyer:

  1. Download the standard "Notice to Creditors and Others" form from Crown Publications (crownpub.bc.ca — it's a one-page PDF).
  2. Fill in the deceased's name, the executor's mailing address, and a claims deadline at least 30 days after the publication date.
  3. Email the completed form to BC.Gazette@gov.bc.ca and pay by credit card — $68.23 including tax at the time of writing. Submissions are accepted until 1 p.m. on the Tuesday before that week's Gazette; the notice runs once, which is all the law requires. (Questions: the Gazette office at 1-800-663-6105.)

Two honest caveats. Publishing is optional — nothing forces you to do it — but for one modest fee it's among the best liability protection an executor can buy, and any estate with the slightest chance of unknown debts should do it. And the shield only covers debts you didn't know about: it never lets you ignore a claim you'd already received, and you're still expected to make the reasonable searches in Step 1.

If a debt collector calls

Collectors sometimes phone the family within weeks of a death, and grief makes people pay bills that were never theirs. You now know the rule they're hoping you don't: the estate owes the debt, not the person answering the phone.

Say this, once, calmly: "[Name] died on [date]. I'm the executor. Please direct any claim in writing to the estate at [address]. No family member is responsible for this debt." Then stop talking to them by phone — written claims only. Never promise to "take care of it" personally, never pay from your own account to make the calls stop, and if the estate turns out to be insolvent, the collector stands in line with everyone else under the rules above. If calls continue to family members who owe nothing, that's a complaint to Consumer Protection BC.

The short version

  1. The estate pays; family doesn't — except co-signed, joint, or secured debts someone keeps.
  2. Pay nothing in week one except protecting the house; let the bank handle the funeral invoice from the deceased's account.
  3. Find everything: redirect mail (form 40-076-696 if you're pre-grant), pull both credit reports, register with CRA, search the land title.
  4. Notify every creditor; always ask about creditor insurance.
  5. Solvent: pay as due from the estate account, hold back for taxes. Possibly insolvent: pay no one and get advice — the payment order is set by law.
  6. Spend the ~$70 on a Gazette Notice to Creditors and wait out the 30 days before distributing.
  7. Get the CRA clearance certificate before the final payout.

Debts feel like the scariest part of an estate. They're usually the most mechanical: find, notify, wait, pay in order, keep receipts. The estate carries the weight — your job is just to steer.

Foxglove is a guide, not a law firm, and this isn't legal advice. Fees, forms, and rules change — verify current figures with the sources named above, and for an insolvent or contested estate, talk to a BC probate lawyer. Steps here reflect BC law for deaths on or after March 31, 2014 (WESA), verified July 2026. The wider process lives in our BC probate step-by-step.