The short answer is filing for personal bankruptcy will not directly affect your spouse or common-law partner. You are responsible for your own debts. There is a common misconception that when you file an assignment in bankruptcy and you are married or living in a common-law relationship, your spouse or common-law partner is automatically responsible for your debts. Often collection agents, when trying to collect from you, tell you that if you don’t pay they will contact and try to collect from your spouse or common-law partner. This is a collection agency scare tactic and as long as your debts are not co-signed, they can only go after you for your debts.
The only exception is if your spouse or common law partner has co-signed or guaranteed your debt. If you both have a credit card issued on the same account, the credit card debt is legally a joint debt.
As you rebuild your credit once you are discharged form bankruptcy, you might not be eligible to co-sign a loan or obtain credit immediately. Or, you may be subject to higher interest rates. This may have an impact on your spouse or common-law partner if you jointly want to apply for credit in the future.
It is often difficult to determine if a credit card is a joint card, or just a supplementary card.
If you are considering filing for bankruptcy or would like to know how filing for bankruptcy will affect your spouse or common-law partner, please contact a Licensed Insolvency Trustee today.
What Is the Difference between Personal and Joint Debt?
Personal debt: An assignment in bankruptcy only affects you and your debts. Your spouse or common-law partner cannot be held responsible for your debts.
Joint debt: If your spouse or common-law partner is a co-signatory for a credit card or a loan, then they are jointly liable and responsible for the debt.
If you would like information on how filing for bankruptcy will affect your spouse, please contact a Licensed Insolvency Trustee today. Our team of Licensed Insolvency Trustees at Crowe MacKay & Company Ltd. will be able to assist you with personal bankruptcy, corporate bankruptcy, consumer proposals, commercial proposal and forensic accounting.
At Crowe MacKay & Company, we have over 60 years of experience and offer free initial consultations. If you have any questions regarding the information above, contact our office today and start your debt relief journey.
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This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice. If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.