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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Can I declare bankruptcy during legal battle?

Can I declare bankruptcy while going thru a legal battle with my estranged wife?It has been nearly two years and nothing has been settle led.I have exhausted all of my monetary links.Will I be held in contempt of court because I have no money left to keep paying all expenses toward my house.

Posted from: Ontario

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One Response to “Can I declare bankruptcy during legal battle?”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

There is nothing in the Bankruptcy and Insolvency Act to prevent you from filing an assignment in bankruptcy while you have an ongoing action in Family Court. However, if there are court orders that prevent you from disposing of marital assets, filing an assignment in bankruptcy, which is actually assigning all of your assets to the trustee for the benefit of your creditors, may be seen as an act of contempt in light of the outstanding court order. The courts in the past, albeit rare occasions, annulled a bankruptcy where the courts felt that it was done to frustrate the spouse’s action before the courts.

You should speak with your family law lawyer to ensure that you are not creating problems for yourself with respect to the marital separation. You should also speak with a trustee in bankruptcy to ensure that bankruptcy is in your best interest.