Joint Invesment accounts in Bankruptcy

December 8th, 2006 by Questions

Me and my wife have about 30K in a joint investment account. Both of us were employed when we funded the account in 2003 and I had contributed 20K and she contributed 20K. We had withdrawn about 25K in 2006 from that account for personal expenses. I had lost my job in March ’06 and have about 80K in unsecured debt that I’am unable to keep up the minimum payments. I am planning to declare bankruptcy. I need to know what will happen to the money in the joint account when I declare bankruptcy. Will all the money go to the trustee or will a portion of it go to my wife?

Questions

One Response to “Joint Invesment accounts in Bankruptcy”



, A licensed trustee said:

The initial decision on how the investment will be handled is up to the trustee.

The trustee, or any of your creditors, could take the position that you have full access to the funds in the investment. You can withdraw the entire amount, and therefore the creditors should be entitled to the entire amount.

On the other hand, if you can prove that you each contributed equally to the investments, the trustee may take the position that half of the investments belong to you, and therefore hald will be seized by the trustee for the benefit of your creditors.

I would suggest that you assemble all paperwork relating to the investment, including proof of who made all of the contributions, and then contact a licensed trustee to review the documents.

Another option would be to file a proposal so that you can keep your investments, although since your debts are greater than $75,000 a proposal under Division 1 of the Bankruptcy & Insolvency Act may be required; your trustee can provide further details.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)