Debt Collectors Calling About a Deceased Relative in British Columbia

Within weeks of a death, a phone call or letter may arrive asking you to pay a relative's credit card, loan or other account. It is upsetting, and some callers sound as if you are responsible. You may not know whether you are, or what you are allowed to say.

This article explains how a deceased person's debts generally work in British Columbia and how to respond calmly without accidentally taking the debt on. How the rules about collector conduct apply to your situation depends on the facts, so it is worth confirming with a lawyer.

This article covers the law of British Columbia.

Debts are dealt with through the estate

In BC, the estate means the property of the deceased person. The personal representative, meaning the executor or administrator, has the authority the deceased would have had and must use it to administer and distribute the estate and to account to beneficiaries and creditors.

A claim against a person is not wiped out by their death alone. It can continue against the estate, with the personal representative as the party. A representative is liable for the deceased's wrongful acts or breaches only to the extent of the assets belonging to the estate, subject to the exceptions in that section. Generally, the estate's assets are where payment of the deceased's debts is expected to come from, and an executor settles unpaid debts before distributing the rest to the beneficiaries.

There are important exceptions in practice. A secured lender keeps its security, and a gift of property that carries a secured debt, such as a mortgage, generally passes with that debt unless the will shows a contrary intention. Loan terms vary by lender. If you signed anything with your relative, get advice before you respond.

When a collector contacts you

After a death, a creditor's claim generally continues against the estate, with the personal representative as the party. How collectors are allowed to contact you is a separate question. The details, such as how often they may call and what they may say, can differ depending on who is collecting and what kind of debt it is. A lawyer can tell you how those rules apply to your calls and letters.

If you are not the personal representative and did not sign for the debt, the useful question is whether there is an estate and who is administering it. How a collector's request affects you depends on your situation, so it is worth confirming with a lawyer.

How to respond without taking on the debt

• Stay calm and do not agree to pay anything on the phone.
• Do not sign anything acknowledging the debt. A written, signed acknowledgement of liability, or a part payment of a liquidated sum, can restart the limitation clock for a debt.
• Ask the collector to send the details in writing: who the creditor is, the amount and the account.
• Say only that the person has died and that any claim should be directed in writing to the personal representative, if one has been appointed.
• Keep a log of every call and a copy of every letter.

If you are the executor, you can respond differently. A personal representative may give written notice disputing a claim against the estate. If the claim is already due, the claimant must then start a proceeding within 180 days after notice is given, and if no proceeding is started in time the claim is forever barred. That bar does not apply to beneficiary claims or wills variation claims.

Time limits and protection for executors

Under the Limitation Act, a claim must generally not be commenced more than 2 years after the day it is discovered, and in any case not more than 15 years after the day the claim arose, with the Act's listed extensions. WESA's 180-day dispute period is separate from those periods.

An executor can also publish a notice to creditors in the Gazette, requiring claims within a stated period that must not be less than 30 days from publication. After that period, the representative is not liable for claims not presented in time. A creditor who missed the deadline may still pursue those who received distributed assets.

Reasonable funeral and disposal expenses may be awarded in a proceeding by the personal representative. If the estate runs short, the order of payment can matter, so ask a lawyer before paying any single creditor.

What to do next

• Find out whether a will exists and who the executor is.
• If no one has been appointed, think about whether you are the right person to apply, and get advice before you do.
• Pass collector letters to the executor or administrator.
• Before paying from your own money or signing anything, check whether you signed for the debt yourself, since a signed acknowledgement or part payment can restart the limitation clock for a debt.
• If calls continue or you co-signed anything, speak with a lawyer.

Frequently asked questions