How Will Bankruptcy in Canada affect my spouse / partner?


Alternatives to Bankruptcy
Credit Repair
Debt Consolidation
Consumer Proposals
Debt Management
Dealing with CCRA

All About Bankruptcy
Danger Signals - What Are They?
Possible Solutions
Filing Bankruptcy or Making a Proposal
Debts Not Discharged
What is bankruptcy?
What is a Proposal?
FAQ about Bankruptcy
FAQ about Proposals
Exempt Assets - Will I Lose Everything?
My Spouse/Partner - How are They Affected?
Student Loans (Canada)
Credit Ratings
Rebuilding Credit
Opening a Bank Account
Secured Creditors
Income Tax Debt
Farmers in Financial Difficulty
Excerpts from the Bankruptcy and Insolvency Act
Who else can help?

Is My Bankruptcy/Proposal Going to Affect My Spouse/Partner?

A party can only be held responsible for repayment of a debt if they signed the original contract, loan agreement or credit card application. If your spouse or partner never signed the original contract or requested a credit card, they cannot be held responsible for the debt. In Canada, marriage alone does not make you responsible for your spouse's debts.

With respect to credit cards, there are two ways in which the second party can be held responsible for repayment of the debt. One is where the individual actually requests a secondary card and signs an agreement saying they accept full responsibility for current and future debt. The other is where the credit card company sends a card out in the second individual's name with the primary cardholder's number and the second individual actually signs and uses the card. Use of the card will hold the secondary person responsible for any past and or future debt.

Should you wish to remove your spouse or partner from your credit card or loan document, you must get confirmation in writing from the financial institution. If you do not obtain written confirmation, there is no guarantee the institution has removed the second party from their records.

Also, responsibility for debt between spouses as listed in a separation or divorce agreement does not legally bind a financial institution or creditor. Unless you obtain concurrence to the division and re-assigning of responsibility of debt from the creditor, they have the right to pursure anyone who signed on the debt.

 

 

This site provides free information about personal bankruptcy in Canada and personal bankruptcy alternatives in Canada, including answers to common personal bankruptcy questions.


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