Question: I have been separated from my husband for 6 years this October. I purchased my own home and he co-signed to help me get approved as I was only working part-time. I am on the joint title of our matrimonial home which he lives in. I just recently discovered that he is on title of my house and that I am only the guarantor. I have always paid the mortgage myself. I am in the process of getting a legal separation but have found out he is considering bankruptcy in Ontario.
He lost a high paying job and is struggling.There is no equity in his home and I’m afraid that they will come for mine. He is also asking that I co- sign for his mortgage which is up for renewal and without me they will not. His income and credit will not allow him to qualify. We have 2 children that we share custody of and I don’t want him on the street but I am worried about the risks. Help!
Answer: You are correct to worry about the risks. If he files bankruptcy, his trustee must evaluate all of his assets. If he owns your house (because legally it’s his house, because he’s on title as the owner, and you are simply the guarantor of the mortgage) then your house could be at risk if he goes bankrupt. Whether or not your house is at risk depends on a number of factors, including the value of the house, and the amount owing on the mortgage.
You should take two steps:
First, talk to a lawyer to fully understand your rights and obligations. Your lawyer may advise you to finalize your separation agreement to protect your house and other assets.
Second, based on what your lawyer advises you, it may be wise for you and your ex to talk to a bankruptcy trustee, so that you are both aware of the risks and ramifications of his declaring bankruptcy.