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Joint Bank Account Questions

My spouse and I have a joint bank account we have historically used to deposit our paycheques and pay bills. The only debt to this bank is a line of credit that is well secured against the house that is in my wife’s names. Due to some business difficulties, I will likely have to go bankrupt in about six months. If we have money in the joint account when I file for bankruptcy will the trustee claim some or all of the money? Does simply removing my name from the joint account protect the money from my trustee? Is there a timing issue?

Posted from: Ontario

One Response to “Joint Bank Account Questions”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

When you file for bankruptcy you are permitted to retain sufficient monies to cover your normal living expenses, but anything in excess to that potentially could be lost as part of the bankruptcy. In terms of timing, the pertinent time frame is the date you file the bankruptcy. Now simply removing your name from the joint account will not serve to protect money sitting in the account but you also need to keep in mind that not all the money would be at risk. On top of the money required to live on, your wife has a 50% interest in any money in that account, so this will be taken into consideration.