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- Debts that Stay in Bankruptcy in Canada
- Canada Revenue Agency Debt
- Does Filing for Bankruptcy Affect My Spouse?
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- Should I Feel Guilty If I Go Bankrupt?
- Common Misspellings of Bankruptcy-Related Words
- Bankruptcy in America
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Does Filing for Bankruptcy in Canada Affect My Spouse?
Filing for bankruptcy in Canada does not directly affect your spouse. Your debts are your debts; only you are responsible for them. If you go bankrupt, your debts are discharged. Your husband or wife or common-law spouse is NOT responsible for your debts.
Many people believe that because you are married, your spouse is automatically responsible for your debts. This is not true. Often collection agents, when they are trying to collect from you, tell you that if you don't pay they will get the money from your spouse. This is a collection agency scare tactic; they can only go after you for your debts.
The only exception is if your spouse has co-signed or guaranteed your debt. For example, if you took out a loan and your spouse co-signed for it, it is also legally their loan. If you both have a credit card on the same account, the credit card debt legally belongs to both of you.
Remember, your spouse is liable for the debt, not because they are your spouse, but because they have signed for the debt.
If all of your debts are in your name, your bankruptcy will not affect your spouse's credit rating. However, the bankrupt spouse may not qualify as a co-signer in the future due to the bankruptcy, so one spouse's bankruptcy may have an indirect impact on the other spouse.
These issues are complicated. It is often difficult to determine if a credit card is a joint card, or just a supplementary card.
If you are considering filing for bankruptcy in Canada and want to know how filing for bankruptcy in Canada will affect your spouse, please contact a licensed Canada bankruptcy trustee today.