Losing a family member is one of the toughest experiences any of us will go through and the last thing we want to have to deal with is their financials at a time of grieving.
Image: Moritz Dittmar
Especially if they where not in a good financial situation. If you’ve found yourself having to deal with this and are looking for a quick answer to the question, What happens to debts when someone dies? The answer is below, source: TaxTips.ca
When a person dies their debts are normally paid out of the assets of the estate of the deceased, before distributions are made to heirs. If the estate is insolvent (the assets of the estate are not sufficient to pay the debts), then the order of payment is prescribed by provincial legislation.
If any unpaid loans to the deceased were cosigned by another person, that person will likely be liable for any balance unpaid after repayments are made from the estate. Some debts may be extinguished upon the death of the debtor – for instance, in the case of insured loans or mortgages.
To learn more about Wills & Estates specific to British Columbia, please follow this link: B.C Wills and estates
If you have any questions, please feel free to get in touch with us and we’d be happy to assist you.