Ex-spouse filed bankruptcy, now they are coming after me

| Category: Bankruptcy in Ontario
Category: Bankruptcy in Ontario | (2) comments

Question: My wife and I recently separated and directly after separation she filed bankruptcy. One of the creditors listed in the bankruptcy is now coming after me for the money however the bankruptcy on her end has not been finalized. Do I have any options?

Answer: If the debt was joint, then the creditors are able to pursue you for the debt, since you did not go bankrupt.  It does not matter that she is not discharged from bankruptcy.

divorce debts joint bankruptcyYou have a few options.

First, you could talk to the creditors and make payment arrangements, or attempt to negotiate a settlement with them.

Second, you could no nothing, but that will damage your credit, and may lead to them suing you and attempting to garnishee your wages.

Third, you could file a consumer proposal or bankruptcy to deal with the debt, but that option only makes sense if you have more debt than you can afford to repay.

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  1. Jeremy

    In this article you didn’t mention litigation. I want to know if my spouse who I am separated from can sue me when creditors approach her to pay off our joint debts. Would I just be sent right back into a second bankruptcy?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Jeremy. In theory, anyone can sue anyone, so in theory, yes, your ex-wife could sue you. However, if the debts were joint, she was just as liable for them as you were, so in effect she would be suing you for her debts. Presumably she would not win that court case, unless you had someone agreed to pay her debts. However, if those debts existed before your bankruptcy, it is again likely she would be successful. I would suggest you discuss this with either your family law lawyer or a bankruptcy trustee to give you a complete answer.

      Reply

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