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June 10, 2021

Collection agencies now chasing the dead

By Gordon Powers, Sympatico / MSN Finance

Debt-collectors’ caseloads have swollen thanks to consumers' increased use of credit cards as well as rising unemployment and household costs. They're reportedly using technology like social networking sites or cell phone texting to get overwhelmed consumers to pay up.

Now it seems that collection agencies are even trying to dun relatives to collect debts owed by the dead.

They're banking on the fact that while the people on the other end of the line often have no legal obligation to assume the debts of a spouse, sibling or parent, they’ll take responsibility for it anyway.

Generally speaking, the only case in which you could inherit a debt is if you’re a co-signer on the original loan agreement. As far as the credit card company is concerned, it can collect the entire account from either person on a joint account.

But you’re only responsible for a debt if you signed for that debt. Just as if the primary guarantor were to default, if they were to pass away, the bank then has the right to come after you next.

Other than that, next of kin aren’t personally liable for debts on the death of a relative. In situations where the assets remaining are insufficient to pay things off, the estate will be insolvent. Family members won’t be called on to “kick in” to settle outstanding liabilities.    

However, something to remember is that a deceased person’s debts are, along with funeral and testamentary expenses, a first charge against the deceased assets; the debts must be paid before the beneficiaries get theirs, says Toronto lawyer Megan Connolly. Otherwise creditors can try and get repaid from any property you've inherited.

This just in … If you want to know just how far debt collectors are really willing to go, have a look at this CBC profile of professional pest Doug Cannon, a.k.a Doug, the Bounty Hunter.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...