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Ms I P

Can a common law spouse declare bankruptcy just to avoid paying settlement?

Posted from: Ontario

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One Response to “Ms I P”

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

This depends on the nature of the settlement, but if that settlement is considered to be an unsecured debt like is the case with an equalization payment, then yes they can claim a bankruptcy to clear themselves of this debt.

But the the nature of he settlement is very important, as certain types of settlement’s can not be cleared by a bankruptcy. However, the
Bankruptcy & Insolvency Act does provide special treatment for certain types of matrimonial issues, for example child support is a debt that is not discharged in a bankruptcy:

So the exact nature of the settlement you are referring to is important.