One person on a joint debt declares bankruptcy
If one person on a joint debt declares bankruptcy will that remove their name from the debt? (statements are being received with both names still on it, even though the other person claims to have declared bankruptcy)
Posted from: Saskatchewan
Once a person is discharged bankruptcy they are no longer responsible to pay the debts owed as at the date of filing provided they are regular unsecured debts like credit cards, loans or services. However, when the debt has a cosigner then that individual becomes responsible for the entire debt. The fact that the statements are still coming in both names is not an indication of who is responsible for paying the debt. This can simply be accounted to a clerical error. To determine if a person has definitely declared bankruptcy you can contact the Office of the Superintendent of Bankruptcy and conduct a search of their records for a nominal fee.
If you have a debt that you cosigned with your (ex)spouse, it is common to outline who will be responsible for payment of the debt if there is a separation or divorce. However, it is important to understand that just because a separation agreement indicates that a person is going to be responsible for the debt, in the eyes of the creditor the original borrowers are still joint liable. If they do not receive payment from one person they will still go after the cosigner, even if a separation agreement is in place.