“If you have unsecured debt, the debt’s going to die with you,” says insolvency counsellor Margaret Johnson, president of Solutions Credit Counselling Service Inc. “Nobody has to take it over and pay it. Debts don’t transfer by virtue of death or marriage.

“However, if you leave an estate, the executor of your estate will have to deal with any debt before assets are distributed to any beneficiaries,” she adds.

“Unless you have signed a contract or co-signed for something, you do not need to take over someone’s debt when they die,” Johnson says. “No one can leave their debts to you or to their spouse. Unless you have signed for the debt, it is not your debt.”

Be warned that aggressive creditors may try to guilt a spouse or children into paying someone else’s credit-card debt after he or she dies. Johnson reiterates the advice above: “Show me my signature.”

“If you’re contacted by a creditor to pay a debt that you do not believe you’re responsible for, request the creditor send you a copy of your signature on the contract,” she says. “Before agreeing to pay any debt, ask for proof that you owe it,” Johnson says. “If you don’t owe it, don’t pay it. It’s that simple.”

But remember: Things work differently if you have a will and leave your assets to specific people.

“Before any money can be distributed to heirs, all the proven debts must be paid,” Johnson says. “After the debts are paid, the remaining assets are distributed among the beneficiaries.”

http://ca.finance.yahoo.com/blogs/pay-day-/debt-death-owes-whom-172556863.html