If you owe debts separately from your spouse or common-law partner (i.e. they are not a co-signer, joint borrower or supplementary cardholder) they will not be affected at all by your decision to file a Consumer Proposal.
One spouse consolidating debt with a Consumer Proposal does not pass liability to the other spouse for debts that were separately held, nor will one spouse’s Consumer Proposal be reflected on the other’s credit history. It is quite possible, and common, for one spouse to restructure their debts using a Consumer Proposal while having zero impact on the other spouse.
Most Consumer Proposals will offer creditors repayment of a portion of the debts owing by way of monthly payments, but your spouse is not held responsible for making payments on either the original debts, or the proposal payments if they are not a co-signer, co-borrower, or co-cardholder. Read more: Am I responsible for my spouse’s debts?
Spouses do not automatically become responsible for paying each other’s debts simply by getting/being married or being in a common-law relationship. In fact, one spouse may not even be aware of the other’s Consumer Proposal filing, as only those to whom money is owed are typically notified of the proposal, further illustrating how separate a couples’ financial affairs and responsibilities may be where no specific co-signing has taken place. As part of our commitment to confidentiality we respect your decision as to the degree of open communication each person maintains with spouses and/or family members when it comes to their debt situation.
In the event your spouse is a co-signer, co-borrower or co-cardholder and you make a Consumer Proposal, your spouse would be responsible for repaying the full balance of the joint debt, less whatever that creditor receives as part of your Consumer Proposal. One alternative option in these circumstances is to consider filing a joint Consumer Proposal.
Although you and your spouse may not share legal obligations for each other’s debts, financial pressures are often shared and can negatively affect your overall wellbeing and can add a layer of stress to your important relationships. Sands & Associates is here to support you and your family through these challenges.
A Licensed Insolvency Trustee can help you understand your options when it comes to managing debt and assess whether one or both spouses making a Consumer Proposal would be an appropriate solution to your specific situation. Book your confidential free debt consultation today.