Bankruptcy and your Spouse

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Many people who are considering bankruptcy wonder how it will affect their spouse. It is possibly the most common question asked.

The answer is easy; your debts are your debts.

If you go bankrupt in Montreal, your debts will be discharged, and your spouse or common-law spouse will not be responsible for the debts.

Some collection agencies will attempt to claim that they will go after your spouse when trying to collect money from you, but this is not true. This is simply a scare tactic and they can only go after you.

There is only one time when a collection agency can go after your spouse, and that is if they have co-signed or guaranteed your debt. Collection agencies will pursue anyone who has co-signed your debt, not only your spouse.

Many people opt to get their spouse a supplementary credit card. Even if the spouse has not signed the card application form, if they have a card with their name on it, and if they have used it, they are responsible for that whole debt.

If you have no joint debts with your spouse, there is only one small effect that could result. If you file for bankruptcy, you may not qualify as a co-signor in the future, which could have an indirect impact on your spouse if they ever need one.

In Montreal, if you get divorced, all matrimonial property is divided between both spouses. However, if you have debts together, you are each responsible for the debt. Even if your separation agreement indicates that you will each pay half, if one spouse does not pay their share, collection agents will go after the other spouse for the full sum.

If either you or your spouse is considering filing for bankruptcy in Montreal, we recommend giving us a call. Our licensed bankruptcy trustees will work with you to establish the best solution for you. To contact us today, click here.

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