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.
There may be an indirect impact on your spouse in the future if you try to obtain financing jointly As you rebuild your credit, you might not be eligible to co-sign a loan or obtain credit. Or, you may be subject to higher interest rates. This may affect your spouse if you jointly wish to apply for credit in your future.
These issues are complicated. It is often difficult to determine if a credit card is a joint card, or just a supplementary card.