Would he have to liquidate his assets?
April 6th, 2015 by Questions
We have been separated 5 1/2 years the matrimonial home and line of credit is in both names, we do not have a separation agreement my husband says he may claim bankruptcy to pay off his debit (credit cards) these cards are in his name only. He has assets money in an RRSP and collector car if he was to claim bankruptcy would he have to liquidate his assets to pay the credit cards off first or would we be forced to sell the house?
Posted from: Ontario
One Response to “Would he have to liquidate his assets?”
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April 06, 2015 at 11:40 am, Doug Stuive, CA | Trustee | CIRP said:
This is the type of question that can’t be answered without more detailed information about the value of his assets, the amount of his debt and the amount of income he earns. In bankruptcy a person does not have liquidate all of their assets. There are a number provincial exemptions that the bankrupt individual would be allowed to keep without an issue. In general a home is not exempt from seizure by the trustee in Ontario. The trustee would look at the value of the home and the mortgage balance and would determine the amount of equity available for the creditors. Depending on this value the bankrupt may have to make payments to the trustee equal to their share of the equity amount in order to keep the home. If the equity is higher than the debt or is a large amount of money the trustee may discuss the option of filing a consumer proposal if you ex-spouse can fund regular monthly payments. If the best option is for your ex-spouse to liquidate his assets then rest assured that if you are on title on the property then you would need to work with the trustee on this matter.