Question: i am in a legal pickle re: my ex husband-he signed over our house to me in a legal, bank exchange during the week after we separated in Aug 2006. The deal, or so I thought, was that i take over a 58K joint credit debt (refinance the house) he incurred mainly via gambling during our marriage.
i was not aware he would go on to declare bankruptcy for 87K 6 months later. he did not/refused to declare where any of the money he spent went when we split. So, having no choice, and him refusing to get a separation agreement in place, we exchanged the house free and clear, so i thought, 58K debt I would take on for the equity (about 100K in total). I had creditors looming and i had to refinance immediately.
Of course his trustee is looking to get the money out of me now, and we are going to trial in the fall on this issue. he hasn't been added as a party and i don't think he will motion to be. i want to keep it in family court because there are several variables involved.
Ex was not making a claim for equalization at the time he declared bankruptcy - he refused to get a separation agreement regardless of written inquiries from my lawyer for months. We separated in Aug 2006, he "declared" bankruptcy in May 2007.
I am wondering if you have knowledge about family court rulings and bankruptcy.
Also, 45K of the 87 he is claiming is money he took from his mentally ill brother while he was supposed to be managing it after his mother died (300 a month or so). Can someone deemed incapable of managing this own funds be placed on a list as a creditor?
Why would the trustee not make my ex propose a repayment plan to his brother (Small monthly payment, as he was to do via his managing role to begin with because the brother had gov't benefits and a lump sum from their dead mother would have negated his benefits) and then a repayment plan to the other creditors? It seems logically that he added this amount (45K) he could have paid back in order to exceed the 70K threshold for consumer proposals?
Also, are my RRSPs (in my name) exempt from this -- they are gone anyway on legal fees now?
I am looking to retain my asset for my daughter. Any advise is appreciated. its a real mess...
Answer: We have one simple bit of advice for you: get a lawyer.
The issues you raise deal with very complicated areas of both bankruptcy law and family law.
In most cases, if a spouse receives a house pursuant to a separation agreement, the spouse can keep the house, even if the other spouse goes bankrupt (subject to certain conditions). In your case it does not appear that there was a legal separation agreement, so this will probably be an issue that the courts must decide (hence your need for a good lawyer).
As for his brother, yes, if he is a creditor, he can be included in the bankruptcy as a creditor. It is not possible to make repayment arrangements with only one creditor; all creditors must be treated similarly. The only exception would be in the case of fraud; fraud is not discharged in a bankruptcy, and therefore the money can be repaid. Again, legal advice is required, since it is the job of the court to determine whether or not fraud has occurred.
Labels: bankruptcy
