Debt and financial difficulties often play a leading role in relationships breaking down, and most people are unsure of how a spouse filing for personal bankruptcy may impact them.
Sands & Associates are Licensed Insolvency Trustees in BC and we meet couples dealing with debt every day. As experts in bankruptcy and debt consolidation services we are here to help you understand all your legal options for dealing with debt; we know that dealing with debts as a couple can present different challenges than dealing with debt as a single person.
Bankruptcy When Married – Key Facts to Know
Many people have concerns about their spouse filing for personal bankruptcy. Here are some basic facts about your spouse filing a bankruptcy:
- You are not automatically responsible for paying your spouse’s debts just because you are married;
- The act of separation, rather than marriage is what can trigger a liability for marital debts under The Family Law Act.
- Unless you have joint or co-signed debt, you do not become liable for repaying your spouse’s debt if they file a personal bankruptcy;
- If your spouse or common-law partner files for bankruptcy, this does not mean you also have to file a bankruptcy;
- If both partners have debts, they may each decide to file a personal bankruptcy.
- Your spouse filing for bankruptcy has zero impact on your credit history or rating.
Consumer Proposals When Married
Filing a Consumer Proposal is an alternative to personal bankruptcy. A Consumer Proposal is not the same process as bankruptcy, and offers many benefits. The same general key facts noted above about one spouse filing for bankruptcy also apply to one spouse filing a Consumer Proposal.
It’s important to understand how financial avenues may impact your family before signing any legal documents. If you or your spouse are considering these, or other options for debt management in BC, a Licensed Insolvency Trustee will help you evaluate all possible debt solutions and how each would work specific to your personal situation.
Debt doesn’t have to steal the spotlight in your relationship – book your free, confidential debt consultation in one of our BC offices today. Our debt experts can help you get out of debt, and gain a financial fresh start!