1-855-514-9358No. Filing for bankruptcy in Ontario does not directly affect your spouse.
It is a common misconception that if you are married, you are automatically responsible for you spouse’s debts. That is not the case.
You are only responsible for debts in your name, that you have signed for. Your spouse is only responsible for debts that they have signed for and that are in their name. Getting married, or living common-law, does not automatically make you responsible for your spouse’s debts.
Wondering whether or not a bankruptcy affects their spouse is one of the most often asked questions we receive. In our FAQ about bankruptcy and your spouse we will address several issues that concern our readers.
Non-Joint Debts
If you go bankrupt in Ontario and all of your debts are in your name, your bankruptcy will not affect your spouse’s credit or debt obligations. A note about your bankruptcy does NOT appear on your spouse’s credit report. Your spouse’s credit report only has information about your spouse; your credit report only has information about you.
However, your spouse is indirectly affected by your bankruptcy. If, after you are discharged from bankruptcy in Ontario, you and your spouse decide to buy a house, there will be a note on your credit report indicating that you went bankrupt, which may make it more difficult, although not impossible, to qualify for a mortgage. Obviously this indirectly affects your spouse, since it may be more difficult now for both of you to buy a house together.
Joint or Co-Signed Debts
If you file bankruptcy and you have an joint debts (you both are on the loan agreement) or your spouse co-signed a debt for you, then your spouse will remain obligated to repay the debt in full, even though you have gone bankrupt. Your spouse will continue to be responsible for the full 100% balance outstanding. For this reason, if there are significant joint debts, you may want to talk to your trustee about filing jointly or both spouses filing for bankruptcy to deal with all of your family debts.
Banks and credit card companies will often ask a spouse to co-sign for a loan. If you co-sign for your spouse, you are responsible for the entire debt. You are liable not because you are married; you are liable because you signed for the debt.
Supplementary Credit Cards
Often when you get a credit card you will also get a card for your spouse. Even though the account may be in your name, if your spouse signs for the card, they may now become liable for the entire balance owing. Before going bankrupt you should review all of your debts to determine if your spouse is joint on any of your accounts.
Separation or Divorce And Bankruptcy
While your spouse is not liable by virtue of being married to you for your debts (your debts remain yours alone) the same principle applies in a divorce. If you had joint debts while you were married, a divorce or separation agreement cannot legally remove any one spouse from the requirements to repay that debt. If you want one spouse to be removed from the obligation to repay joint debts, you will need to receive written agreement (basically a new loan agreement) from your lender. If you are separated and one spouse files for bankruptcy, the other spouse will be liable for joint debts, no matter what your separation or divorce agreement says.
These issues are complicated. It is often difficult to determine if a credit card is a joint card (because you both signed for it), or just a supplementary card (where you got the card for your spouse, and they never applied for it).
If you are considering filing for bankruptcy in Ontario and want to know how filing for bankruptcy in Ontario will affect your spouse, please contact a licensed Ontario bankruptcy trustee today for a free consultation.
When you meet with the trustee, bring copies of all loan documents and recent statements so that the trustee can review them to determine if you have any joint debts.
What happens if your spouse gets an inheritance while you are in bankruptcy?
If your spouse is not bankrupt, it’s your spouse’s money. It has no impact on your bankruptcy. It’s only an issue if you as the bankrupt get an inheritance while bankrupt.
How do I find out if my bankruptcy has been cleared after the allotted time?
Hi Linda. I’m not sure what you mean by “cleared”.
If you are referring to the period of time it appears on your credit report, the best way is to get a copy of your credit report and see if it still appears. You can mail this form to Equifax for a copy of your credit report: http://www.consumer.equifax.ca/ecm/canada/EFXCreditReportRequestForm.pdf
If you are referring to your own discharge, you should contact your trustee directly.
My husband is thinking of claiming bankruptsy but we had a vehicle that was reposessed snd its in both our names. He is paying weekly off his pay check. How will this effect me if hr claims bankruptsy since i am on disibility?
Hi Tammy. If your husband claims bankruptcy, the vehicle lender can pursue you for the joint debt. However, if you are on disability and have no other assets, there is not much they can practically do. They can’t garnishee your wages, because you don’t have any. I suggest that when your husband is discussing his situation with his bankruptcy trustee, you should attend and ask this question as well so the trustee can fully evaluate your situation and help you decide if any additional actions are required.
I am considering filing bankruptcy. Our house is only in my wife’s name. She bought it after we got married. Would she lose the house if I filed bankruptcy?
Hi Jay. If only you are filing bankruptcy, and if all of your debts are in your name and not hers, and if the house is only in your wife’s name, and always has been in her name, then your bankruptcy does not impact her ownership of the house. As long as the mortgage payments and property taxes are paid, she can keep the house.
This is always a concern when one spouse is contemplating bankruptcy, so feel free to contact an Ontario trustee for more information.
If my spouse files for bankruptcy, and I own our home,but the home equity line of credit is joint, can I lose the home? The monthly payments and the property taxes are up to date and paid timely.
If my spouse signed as a guarantor in the home equity line of credit, does that mean anything?
If the payments continue to be made on the home equity line of credit (the mortgage) and the property taxes the bank won’t take your home, even if your spouse files for bankruptcy.
The most important consideration will be whether or not there is any equity in the house at the time of the bankruptcy, so this is a question your spouse should ask their trustee before making any decisions.
If husband has house on his name and wife is not co-signer for his mortgage, wife has another house and husband is not co-signer for her mortgage, they are living in husband’s house. If husband files bankruptcy for his house mortgage and other credit card debt, should wife be responsible for half of the mortgage for husband’s house as they are living in his house and considered as matrimonial home? Or wife shouldn’t be responsible for husband’s half of the mortgage if she is not co-signer for the mortgage.
If the husband files bankruptcy, his trustee will be responsible for converting to cash any non-exempt assets in the husband’s name. If the husband owns a house with equity, that equity forms part of the husband’s estate. Assets owned by the wife are not generally relevant in the husband’s bankruptcy. This is a complex area, so the advice of a licensed trustee should be obtained before deciding on your course of action.
What happens if I am getting married after I claim bankruptcy? Do I need to tell them that I am getting married before I file ? We don’t live together and I claim signal ?
The amount you pay in a bankruptcy is based on your family size, and your family income. So yes, if you get married during your bankruptcy it may impact the amount you are required to pay towards your surplus income (your payments may go up or down, depending on your new spouse’s income).
I would suggest that you discuss this with your trustee before you file, so that they can “run the numbers” to show what you would be required to pay both before and after you get married. If it’s likely that your bankruptcy payments will stay the same or decrease when you get married, it’s not an issue. If it’s likely that your payments will increase, you may want to consider a consumer proposal as an alternative to bankruptcy.
My husband sold our home last Christmas because he’s in $50 k plus credit card/bank loan, there was $15 k payout used to make payments. We are in an apartment. We wish to relocate from Calgary back to Ontario asap for family reasons. So weary from moving, we’de prefer to purchase a modest home and then file. The $7 k downpayment with no equity, would this enable us to keep the house? My husband has an income over $70 k and I am on $12 k CPP
This is a question you should discuss with an Ontario trustee before you decide to file, since you don’t want the creditors to object to your discharge from bankruptcy. The issue is that if you have a $7,000 down payment, the creditors could argue that the home is therefore worth $7,000, and so that’s what you should have to pay towards the equity in the bankruptcy. The other issue is that if your husband earns $70,000 it is likely that he will have surplus income, so a consumer proposal may be a better option due to both the house and the potential surplus income.
Will I be responsible for my husband’s credit card debt because his name is on our house. The mortgage is in my name only and the credit cards are only in his name
Hi Lois. No, you are only responsible for debts that you have signed for. If the credit cards are only in your husband’s name, then the credit card company can only pursue him, not you.
If your husband does not pay his credit cards and they sue him, they could put a lien on his share of the house that you both own, so I would suggest that even though you would not be directly responsible it is still important for your husband to deal with his debts.
My girlfriend is in car sales and her paychecks are inconsistent making it difficult to budget. She needs $1140 every 2 weeks to make ends meet but brings in on average $950 every 2 weeks. I financed her car that had an outstanding lean from her other car which totals $44k, she owes $17k to student loan(she’s been out of school for 10 years, $2500 personal loan under her name, and my line of credit is now negative $4k because of having to give her money all the time. I make $45k a year and have everything under my name and have immaculate credit. If she goes bankrupt can I be put on the creditors list and have the car loan and my line of credit payed off by the trustee?
Hi Matt. My advice would be for you and your girlfriend to meet with a trustee and go through your scenario in detail, since the answer has many permutations. The trustee will want to know what you mean when you say you “financed her car”. Did you loan her the money and register a lien, or did you co-sign for a loan on her behalf? Also, if she goes bankrupt that does not impact your debts, unless you also go bankrupt. Finally, the trustee does not pay off the debts; the trustee takes whatever money is available and distributes it to the creditors, but in most cases the debts are not paid in full. Again, meeting with a trustee to review this in detail is your best option.
My parents have been separated for a year now, and my dad recently declared bankruptcy. He consolidated all his debt with the mortgage at 200k+ ; which my mom consigned for. If she’s unable to pay off the debt, will she have to declare bankruptcy as well? What are her options as a co-signer? Considering both are retiring next year, my mom and I are renting an apartment, meanwhile my dad remains in the townhouse.
Hi Jorge. The answer depend on the value of the house. If the house can be sold to pay off the mortgage, your mother would presumably have no debt. I would suggest meeting with a trustee to review her options in detail.
I am considering bankruptcy. All my debts are in my name except our house is in both names.I am in Ontario and my wife is in another country. Will my going bankrupt affect any property she owns in the other country.Thanks
Hi Warren. Assuming your wife owns the property in another country in her name and there are no loans in your name against it, your bankruptcy would not impact her property.
I own a small business that isn’t incorporated, so If I file for the business I would be filing personal. This will be my second bankruptcy, my taxes are behind. Would they do file my taxes and would my taxes be cleared as well??
I have no equity, besides the goods in the store.
Any advice would be helpful
Yes, personal taxes are included in your bankruptcy, and you are correct; since your business is unincorporated, all of the taxes are personal. The trustee will file your taxes, provided you are able to provide the information necessary to file them.
I have a judgment obtained against me five years ago for an unpaid loan. Can the creditor put a lien on my family home if the house and mortgage is in my wife’s name and the house was purchased by my wife three years ago?
Hi Ben. In theory, anyone could put a lien on your home. However, if you don’t own the home, it is unlikely that they would, and in any event it’s unlikely that the lien would be valid (although if they did put a lien on your home without the right to do so you may need to get a lawyer to assist in having it removed).
So, if the house is in your wife’s name, it is unlikely a creditor has the power to put a lien on your home. However, the judgment still remains, so it would be wise to make a plan to deal with the judgment so that’s it is dealt with before you have assets or income in your name that could potentially be at risk.
I was wondering how this described situation will play out. If the husband claims bankruptcy but the wife owns 99% of the house and the husband only 1%, what will happen to the house? The husband is a co-signer for the mortgage and there is about $500K equity in the house. Currently the couple are separated but at the time of purchasing the house they were married. The percent ownership (described above) has been the same since the purchase.
Thanks in advance,
Bryan
Hi Bryan. Assuming the facts you have given, the husband’s share of the equity is 1% of $500,000, or $5,000, so the trustee in the husband’s bankruptcy would want to realize $5,000 for the benefit of the estate (either from the husband, or by selling the trustee’s 1% interest to the wife for $5,000). You should contact a trustee for a more detailed explanation, given the specifics of your situation.
If I want to claim bankruptcy for my own debts, will my husbands wage be factored in to determine my payments?
Thank you
Jan
Probably – the cost to file is based on household income and size (the number of people that are being supported). Your spouse doesn’t have to co-operate and disclose his income, but if he doesn’t you are only permitted half of the normal government allowance for your family. For example, the government thinks a family of 4 needs $3,831 of after tax income to have a reasonable standard of living in Canada. If the household income is over $3,831 then there are additional payments into your bankruptcy. If your spouse refuses to disclose his income then you are only allowed $1,916 of after tax income before additional payments are required.
What’s most important Jan is that you discuss all of this with your trustee BEFORE you file so there are no surprises. You want to know how the calculation will be done and how much you are likely required to pay. Good luck sorting things out.
My husband’s self employment business is going under. He owes HST arrears & wants to file personal bankruptcy due to high credit card and line of credit debts he incurred to date. I am not a co-signer relative the business nor his personal debts.
We are co-signers on our mortgage though I have been paying it and the utilities for years. I am currently on CPP disability and wonder if the CRA can seize our home equity?
Hi Yvonne. You and your husband should contact a trustee to discuss your options. The issue is not who is the co-signer on the mortgage, but who owns the house, and how much equity is in the house. A trustee can show you how the calculation works, and then help your husband decide whether or not a bankruptcy is the correct option.
I have been separated from my spouse for almost 3 years and recently launched a small claims court action against her to recover money lent to her for a business that she had opened up. This money was lent to her after we had separated. I received a default judgement as she never responded to the claim. She declared bankruptcy a couple of weeks ago and I was wondering if I would still be a “deferred” creditor as we are still legally married but separated?
Hi William. If you have a judgement against a person who goes bankrupt, you become a normal unsecured creditor in their bankruptcy. You are not a preferred creditor. Your lawyer or her bankruptcy trustee can provide you with more information if required.
my ex husband wants to file bankruptcy we both have our names on the mortgage. Will I loose or have to sell my house.
Hi Joan. A more pertinent question is whose name is on the ownership of the house. If the house is entirely in your name, and your ex-husband remains only on the mortgage, his bankruptcy would not automatically trigger a loss of the house, provided the mortgage is continuing to be paid. This is a question you should ask a family law lawyer who can review your separation agreement and other documents to give you a more specific answer.
Hi,
If a wife has a house and a business under her name only and the husband is running the business for her, in case if they decide to separate in future and husband owes the wife a lot of money…what happens in such case ?
Hi Sara. It’s impossible to answer your question without knowing all of the facts. In simple terms if the ex-husband owes the wife a lot of money, he would presumably make arrangements to pay it as part of the separation agreement. If the husband goes bankrupt, the wife would be a creditor in the bankruptcy.
My daughter is considering bankruptcy. She has a young child, and moved from Alberta to Ontario. She has credit cards in her name and is not receiving any support for either herself or her child.
She has just started a part time job that will eventually become full time at minimum wage. She does not make enough money to pay for an apartment by herself and is residing with family.
We purchased a used vehicle for her to get to work and to make things easier for her to get around the baby. It worth less than $5000.
Would the vehicle be taken from her to help repay debts if she claims bankruptcy?
Hi Stephanie. Under Ontario law, a motor vehicle worth up to $6,600 is exempt from seizure in a bankruptcy in Ontario, so if her vehicle is worth less than $5,000, and if it does not have any loans registered against it, she would not lose it if she files bankruptcy. Here’s an article that explains whether or not you can keep your car if you file bankruptcy in Ontario.
I currently have about $25,000 in credit card debt that is entirely in my name. I owe about $800 in personal income tax. I have been running a small business (not incorporated) that might owe about $800. I own a 2005 car worth about $5000. I married my wife in 2000. My wife has the mortgage, line of credit property taxes in her name since she purchased in the house in 2003. We have no co-signed joint debt or even a joint bank account. If I filed for personal bankruptcy and she decided to sell the house before or during my bankruptcy. Would that effect my bankruptcy at all? We live in SW Ontario….
Hi Russ. If it’s your wife’s house, and she owns it 100%, and the mortgage is in her name, she can sell it while you are bankrupt and it would have no impact on your bankruptcy (because its not your house).
I’m divorced since 2008 and my ex husband claim his small business bankruptcies in 2012,is this going to affect my house.Thanks
Hi Sanna. If it’s your house, and if you did not co-sign or guarantee your ex-husband’s debts, his situation should not impact your house. You could ask your family law lawyer to review your separation agreement to see if there are any potential issues.
If one spouse was issued a supplement credit card that she did not signed for, can she be held responsible to repay that debt in either a bankrupcy or consumer proposal?
Yvon: You are only responsible for debts you agree to be responsible for. So, a spouse who did not sign for a supplementary card would generally not be responsible for any debts related to that card.
I have a quite a bit of debt in my name. My husband and myself have the mortgage and taxes in both our names on our house. I am considering filing bankruptcy, will this affect our home ownership or am I able to have my husband take over the mortgage? I do not pay the mortgage or taxes he is primarily responsible as they come from his account with his bank. I believe our mortgage is at 149 000 with the value being roughly 185 000. We also have 4 children.
Hi Tracy. Your husband can take over the mortgage. The issue is that as the joint owner of the house, you are responsible for paying your share of the equity to your creditors if you go bankrupt. We explain in more detail in this article on what happens to my house if I go bankrupt in Ontario. Since it appears that there may be some equity, a consumer proposal may be a better option for you. Feel free to contact an Ontario licensed insolvency trustee for a no charge initial consultation to explore your options.
My brother owns a matrimonial home with his wife. They separated and the wife then declared bankruptcy.. My brother is willing to pay out his wife’s share of the equity in the home.. The bankruptcy trustee says they are willing to transfer “their interest” in the property to him if he pays her equity. Does that take away her ownership in the property or does that mean his wife is still on the deed and he will still need her to sign off her ownership in the property?
Thank you
Hi Ember. Your brother will have full title to the home if he purchases the interest from the trustee, and the transaction is done through a lawyer who can change the title. If he just buys the trustee’s interest, the title doesn’t automatically change, so he will want to have a lawyer involved to ensure he gets full title.
Thank you very much.
Hi J. Douglas, I have filed for bankruptcy and I am not discharge for 2 years. My Wife of 5 years and I have no joint ownership of anything . She wants to buy a house, will I affect her in any way with my circumstance.
Hi Steve. Your bankruptcy does not directly impact your wife. If she has good credit and a down payment, she can buy a house without your involvement. The only impact your bankruptcy would have on her is that you would not be a great co-signer for her, but if she does not need you as a co-signer than your bankruptcy should have no impact.
Hi J, Douglas , I went bankrupt a few months ago and my common law spouse just sold the house. We have no joint accounts and the mortgage is solely in his name, after he has all his debts paid from the sale of the house there will be approx. 50,000 left over. Is this considered surplus income ? Will I have to pay on this surplus ? Seeing this is his money from the sale on a property that is solely in his name.
Thank You
Hi Trish. No, the sale of an asset by a non-bankrupt spouse is not considered income (it’s the sale of an asset). Since it was his house in his name, and he is not bankrupt, the sale should not have any impact on your bankruptcy.
My daughter and husband live in Ontario…she put a down payment on a house and made the mortgage payments for 10 yrs. Her husband started a small business which is in deep debt now.he wants her to sell the house to pay his debts. If he goes bankrupt,will she lose the house to pay his debts?
Hi Lynn. Whether or not she will lose the house if he goes bankrupt depends on a number of factors, the most important of which is “who owns the house?” If the house is entirely in her name, his bankruptcy does not impact her house. If the house is owned jointly, the trustee in his bankruptcy will want to recover his share of the equity. The next issue is the amount of equity. This is a somewhat complicated calculation, so your daughter should consult an Ontario licensed insolvency trustee for a detailed (no charge) review of her situation.
Hello. I declared bankruptcy in December of 2015. I am now at the point in my current relationship to move in with my boyfriend. I was told at one of my counselling sessions that if I live with someone, their income is consider into the amount I currently pay. Is this true? He makes considerably more than I do but of course has his own bills to cover. We would not be common law until we live together for 12 months. Does his money count as well after the 12 months? Any help in this area would be greatly appreciated.
Hi Vicki. This is a question you should ask your trustee. Surplus income is based on the “family unit”, so if you are not married and not common-law your boyfriend’s income would generally not be considered relevant in your bankruptcy.
If my fiance files bankruptcy will I still be able to get osap to go to school? Does it matter if we are married or common law?
Hi Sheryl. Yes, your fiance’s bankruptcy should not have any direct implications for you applying for OSAP.
If my father declares bankruptcy and their matrimonial home is in my mom’s name (but his name is on the mortgage as a guarantor) will they be able to keep their house?
Hi Kate. Yes, if the house has always been in your mother’s name, and if she is not going bankrupt, his bankruptcy should not impact her home, provided the mortgage payments continue to be made.
My husband had filed for bankruptcy more than two years ago. He had a credit card in his name and a supplementary one in my name.
His bancrupcy was discharged, but collection agencies are calling me to repay the debt. I checked my Equifax and transition credit reports and found nothing related to this credit card account in my name. Do they have the right to call me or try to collect from me.?
Your advice is appreciated.
If the card was entirely in his name, legally it was his debt, and they cannot pursue you for it (which appears to be the case, since it does not appear on your credit report). I would suggest simply informing the collection agents that:
1. it was his debt, and he went bankrupt, and
2. the debt is more than two years old, so the limitations period has expired, so they cannot sue you for it even if it was your debt.
Hi J
I would like to thank you for taking the time to answer my questions and concerns on February 24.
Your advice was helpful and much appreciated.
Regards and I apologize if this message was unintentionally repetitive.
Hi looking forsome quick advice. My boyfriend is claiming bankruptcy this Friday. We do live together He shut his business down and is claim bankruptcy personally and for the business due to a large amount of back taxes owed to the cra. I am currently 4 months pregnant. His business partner is telling me I will not be able to list him as the father on the birth certificate not give out child his lastname. I am so beyond stressed. we have no joint accounts in any way both have always claimed single on our taxes and I have never had anything to do with his business in any way. The one thing is i do have him on my work benefits which i pay for as.my spouse. Is the CRA going to come after me once he claims bankruptcy? What do I need to do to protect myself.
Hi Jennifer. I don’t see why the CRA would come after you for his debts. It doesn’t matter if you are married, or common-law, or having a child together, his debts are his debts.
Since you don’t have joint accounts, that is the best protection (i.e. keeping your financial affairs separate).
I don’t think you need to worry, but if you are concerned, ask to speak to his trustee so you can get answers to your specific questions.
Hi….my girlfriend and I are buying a house together and I may have to claim bankruptcy due to an incorporated business going under and CRA taxes owing with a partner….she is concerned her property in her name will be affected and used but if the home has no equity in it (being just bought) she shouldn’t be concerned should she? Also, being incorporated as a business and bankrupt, how does that affect what’s owing on taxes that I can’t pay for to the gov’t?
TIA
Hi John. You are correct, if there is no equity in the house there is nothing for the trustee to seize, but I would not want you to rely on general comments. I would suggest you and your girlfriend meet with a Licensed Insolvency Trustee in Ontario (the first consultation is free) and go through your specific numbers so that you know exactly how a bankruptcy will impact both you and her.
Hi there,
I’m currently in bankruptcy and am separated. I have to transfer money to my ex spouse every month for rent due on a property we are both signed onto.
1) does the trustee have access or rights to her bank account statements? Can she outright refuse legally?
2) does her having her name on my lease for security impact my separation agreement? She currently resides with our children elsewhere.
Hi Rick. In general terms, the trustee does not have access to your ex-wife’s bank statements. As to what will impact your separation agreement, that is a question best answered by your family law lawyer.
Does claiming bankruptcy protect a person from future CRA reassessments of previous years? If not, will bankruptcy have to be completed again in the odd case that it does happen?
Also, in general, during my bankruptcy can the assets of a common law partner, like an engagement ring bought for her, be taken from her (bought before the bankruptcy)? What are the exceptional circumstances? Just curious.
– Ontario
Yes, the point of bankruptcy is to discharge your debts, so all prior year’s tax debts are included in a bankruptcy, even if for some reason they are reassessed in the future.
In general, the assets of your non-bankruptcy spouse are not taken in your bankruptcy. The exception would be if you intentionally transferred assets to your spouse prior to bankruptcy. Buying an engagement ring is probably not an issue. Buying a $100,000 diamond ring the day before you file bankruptcy, and giving it to your spouse, would be an issue, so that is a transaction you would want to discuss with your trustee before you file.
I have been separated from my husband for 2 years and have filed for divorce. While we were married, I co-signed for his car loan. Our separation agreement says he is responsible for his car loan and he was supposed to transfer his car loan to his name only. He has not done so and intends to declare bankruptcy. Will I be responsible for his car loan if he keeps his car and makes the payments, or if he surrenders it to the lender?
Hi Laura. Since the lender was not party to your divorce, the separation agreement between you and your ex does not impact the bank, unless they agreed to it. So, if your ex stops paying for the car, and he goes bankrupt, and the bank seizes it, and there is a shortfall, you would be liable for the difference. If this happens, you should discuss this with your divorce lawyer, or a licensed insolvency trustee to determine your options.
Hi, I’ve fallen really far behind and am considering bankruptcy. All credit cards and lines of credit are in my name. Mortgage is in my name as well. My spouse and I have separate bank accounts. I bought our house in Ontario 2.5 years ago so there’s likely not much equity. We have a baby on the way. I make between 75000-80000 per year and just started my new job 1 year ago. Is there any chance we could lose the house or any contents (furniture and appliances are owned)? Will my new career be negatively affected? Is there anything my spouse should be worried about? Thank you.
Hi Michael. If there is minimal equity in your home, and if the mortgage payments are current, you would not lose your home if you go bankrupt. In most cases furniture and appliance don’t have much resale value, so you likely would not lose any of those items either. In most cases a bankruptcy does not impact your career, but I can’t answer that question without knowing what you do for a living. I suggest you contact a local licensed insolvency trustee and they can advise you on how it would impact your career, and answer any other questions you may have.
Hi! My husband was discharged for bankruptcy ,will it me affect if will buy house with my sister in the future , he is not part in mortgages it’s because my married status that’s why I’m worried ,thank you!
If I am understanding your question Wilma, you want to know if the fact that your spouse has a bankruptcy on their record will impact your ability to buy a house? It shouldn’t if he is not one of the people buying the house. You and your sister should be assessed on your own credit worthiness. Your spouse should not be a factor unless you need their income to qualify for the mortgage.
Hi,
My friend has a matrimonial home which she coown with her husband. They are separated and just now starting the process. Husband is trying to file bankruptcy. Does his bankruptcy will have a lien in the matrimonial home which they both own?
If the ex-husband files for bankruptcy then his interest in the home will pass to the people he owes money to. That means the bankruptcy trustee will want to sell the home to get at any money the ex-husband might be entitled to. The first thing the trustee will do is determine if there is any money in the home to go after. If there is then the trustee will ask your friend if they want to buy the ex-husband’s half. If that doesn’t work the trustee will want to put the house up for sale and the proceeds will be split between your friend and the bankruptcy.
Your friend should speak to a trustee directly to make sure they understand how all of this works…
I am married, self employed, considering personal bankruptcy. My wife has has no joint debts with me.
I am concerned about the calculation of surplus income.
Right now because I am making very little, she is paying all the expenses, and it it very tight for her – plus making payment on her debits.
If Surplus income is based on 2 people living in the household – it will leave her without enough money to cover her debts?
How can I have surplus income based on just me ?
any other thoughts?
Your spouse is not required to disclose their income when you file for bankruptcy (unless they are also filing). If they do not disclose then your trustee is only allowed to use 50% of the normal threshold when calculating your surplus income obligation. For example, the threshold for 2 people is $2,743 of income. If your spouse refuses to disclose then the threshold is reduced to $1,371.50. You would be responsible to pay surplus on every dollar of income over and above that threshold. This is something to discuss in detail with your trustee before you decide to file.
I am considering filing for bankruptcy. However, we have a home we need to sell later this year. If I file for bankruptcy in 2-3 months and all debts are in my name and our family home is only in my wife’s name, can creditors place a lien on it?
Your creditors cannot pursue your wife’s assets for your debts, whether or not you go bankrupt. A licensed insolvency trustee can review your situation and give you more specific advice about the house and your debts.
Me and my wife will lose whole of assets if I bankruptcy, or she can keep half of it and I will only lose my part. Thanks
If both you and your wife file for bankruptcy then you will both lose whatever assets you own that can be taken under the law. If only you file for bankruptcy then your wife is entitled to keep her assets. Make sure you discuss this with whichever licenced insolvency trustee you are speaking to BEFORE you decide to file.
if me and my spouse are separated, is my spouses income considered part of my family unit for bankruptcy because he pays me child support?
Hi Joanne. No, if you are separated your spouse’s income is not considered in the calculation of surplus income; you would include the child support you receive in your calculation of income. Hope that helps!
Hello. I have no assets. I have very little debt, but I’m involved with a lawsuit that I am fighting as a unrepresented litigant since I can’t afford a lawyer. If I lose my case, and file for bankruptcy can it effect the assets that belong to my wife? She owns a house that predates our marriage, and there is a marriage contracts that stop me from accessing her assets, she ownes a business that has nothing to do with me and ots in her professional industry. Also can the opposing party stop me from being discharged? I have never had a bankruptcy and I am with good credit.
Hi David. Assuming your wife’s assets have always been her assets, your bankruptcy does not impact her assets. Any creditor can object to your discharge, so before filing bankruptcy you would want to review the possible outcomes with an insolvency lawyer or a licensed insolvency trustee.
Hi,
I have a quick question, if my husband and I both own a home “Shared Mortgage” and I declare bankruptcy due to other debt (only in my name, not with my husband), will it affect him?Will we lose the home? He will still be able to pay the mortgage normally as his income wasn’t affected.
Thank you
If you file for bankruptcy then your share of the equity in the house is something that has to be dealt with by your trustee. An amount equal to your share of the equity will have to be paid into the bankruptcy in order for you to be discharged (released from bankruptcy). Most trustees will allow you make a payment plan to deal with it – if the amount is too big to deal with in this way then you may have to refinance the house, or even consider selling it. It all depends on how much money you have to pay.
Hi I am separated from my husband for 5 years and I have a joint account with him and I went bankrupt, I also got my discharge papers is the bank supposed to take me off that account because it is still showing I’m on that account. How do I get off his account as its not my debt line of credit which he still owes money for and still showing joint.
Hi Lori. This is a question you should ask your trustee. If the joint account was included in your bankruptcy, you, or your trustee can contact the bank and advise that your portion of the debt was discharged, and therefore you should be removed from the account. Your trustee will know whether or not the bank filed a claim in your bankruptcy, so you should start by discussing this with your trustee.
We recently sold our house to pay off our bills, we now rent and have no joint bills. We have a current year vehicle which was paid for by the proceeds of our house. It is in both our names, do we stand a chance of losing it if I declare bankruptcy?
Hi Steve. If it’s a newer vehicle, yes, you may lose it in a bankruptcy. Full details here: https://bankruptcy-ontario.org/bankruptcy-in-ontario/ontario-bankruptcy-exemptions/ Feel free to reach out to us and we can discuss your options.
I married and moved in with my husband, who was still living with his elderly Mother in her home. When she passed away my husband inherited her home. it was inherited it is in his name only and there is no mortgage. Our finances have always been separate and he pays all the bills. We are separating but I will still be living in his house until I can afford to find a place to go. I do not work and have to file for bankruptcy as I can’t pay my debts. Do I have to include his income when calculating surplus income even though we are living separate and apart but in the same house?
If you have no income of your own then the question isn’t relevant. You are required to disclose household income so that your trustee may determine if you are required to make additional payments based on the number of people in the household and your share of the income. If you have no income then your share is 0% so no penalties will apply. Make sure you discuss this with your trustee BEFORE you file. T
What happens to my house during a separation if I go bankrupt and not my spouse but we are both on the title.
Regardless of your marital status, if you file for bankruptcy then any interest you may have in the house “vests” (is transferred to your bankruptcy estate for the benefit of your unsecured creditors. In other words your share of the equity belongs to the people you owe and if arrangements can’t be made to have it paid to them then the house may be sold. The other owner(s) would receive their share of the net proceeds and your bankruptcy would receive your share. In most of these cases the other owner(s) are asked if they want to “buy” the bankrupt’s share instead of the house being sold.