What happens to other debt
I am very recently separated from my husband. All debts accumulated during the past 5 years have been in my name. I have a consolidated loan that will be paid off next Sept and a car loan which were co-signed by my parents. Is it possible to include all other debt in filing for bankruptcy and exclude these two loans that have been co-signed? I know that I can continue the payments on these, with living expenses but I can’t handle the rest. Can I do this?
When filing a consumer proposal or a bankruptcy in Canada you are required by law to list all of your debts. This means that all secured and unsecured debt must be listed, but any secured debt operates outside of the Bankruptcy and Insolvency Act. Meaning, as long as the lender agrees you will be able to continue to make payments on the car and your parents should remain unaffected. However, if the line of credit is an unsecured debt it must be listed and during bankruptcy you cannot make any payments on that debt. However, once your bankruptcy is completed and you have been discharged, you can go to any of your creditors and make any payments you whish, whether this be payment in full or part of any combination of the debts that were cleared by the bankruptcy.
For more details on filing bankruptcy in Canada and specific options when dealing with your parents, this you should contact a licensed trustee in your area and he will be able to review these types of issues in much greater detail.