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banruptcy/consumer proposal

I still live with my parents and was wondering if my household income would have to include theirs if I were to declare bankruptcy or file a consumer proposal? Also if I were successful at either would my creditors be able to go after my parents even though they never co-signed for anything?

Posted from: Ontario

One Response to “banruptcy/consumer proposal”

A licensed trustee said...

The second question first – your creditors cannot pursue your parents for your debts unless they co-signed or co-borrowed the money. Based on what you’ve said, they should be fine.

The first question may be a bit more complicated. If you live in your parent’s home, but reside separate from them then they would not be included in your household income. By living separate I mean do you buy and prepare your own meals, are you living in a sepaarte apartment within the house – if someone looked at your living arrangements would it be obvious that your parent’s were more like landlords than roommates…

If they are more like roommates – you eat together, mom is doing your laundry, they are covering all of the household bills, then it is much more likely that their income will be factored in. Your trustee will be the one that makes this decision based on what you tell them.

A word of warning – if for some reason you fail to perform all of your duties properly and end up in Court then the Registrar that hears your case may very well decide to include your parents’ income regardless of what your trustee has decided. If you file for bankruptcy make sure you follow all of the rules so you don’t end up in Court…. A proposal would be better still, if you can manage it.