Archive for the ‘bankruptcy and spouse’ Category

Question: I am considering going bankrupt. Our home is in my wife’s name solely. I am not on the mortgage nor did I co-sign. She owns it on her own and pays for it. I run a separate business and wonder if she will be affected. We do not share any cards or loans nor have co-signed or have supplementary cards. We are completely separate financially. How can this affect her? Please advise.

Answer: Your bankruptcy does not directly impact on your spouse. She does not lose her house. There will be nothing on her credit report if you go bankrupt.

For a more detailed answer, here is an article on how bankruptcy will affect your spouse.

Question: Hi, Thanks in advance for answer my questions!
It looks like I will have to go bankrupt but my husband does not. We own a small business together. Will the bank close our business account which is in both names? and all our joint accounts and lines of credit? Should we open a new account at another bank before this happens in order to insure that our business keeps running with out a hitch? We are planning to incorporate and put the company soley in my husbands name. Is there any reason we couldn’t do this?

Answer: Yes, if you are going bankrupt in Ontario and your husband is not, you should both open separate accounts in each of your names, and close all joint accounts. It is often wise to do this at a new bank. As for the business, it depends on the current value of the business. If the business has no assets and no value, then yes, it would be wise for your husband to incorporate the new business in his name. However, if the existing business has value, you do not want to be accused of hiding assets before you go bankrupt, so you should discuss that in advance with your bankruptcy trustee.

Question: My spouse filed bankruptcy in the middle of 2004. He was discharged in August 2005..I was sent an authourized credit card application soley in my name in November 2005 and put him down as a co applicant with his social insurance #…Not even thinking that I was going to recieve a credit card on my income, I was issued one along with one for my husband. I was told since he could not get one with out being a secured card I was soley responsible for the account and this card was issued to myself and him.
Now the question… I had to file for bankruptcy due to a business venture gone bad last year(2007)…they have been harrassing me and calling for my husband to pay this balance on the card wich is $2200, can they do this?…and if I was soley responsible for this card and he could not get one on his own…would they not look at his social insurance number on my application and deny him one and issue me one alone. I called them and asked about this and they told me that they would issue me a card and him one but since his bankruptcy, I was soley responsible to pay my account…..Please Please help.

Answer: If your spouse never signed for the card, and never used the card, then they are not responsible for the card. However, if your spouse did use the card, it is harder to make the case that he is not responsible. He has a few different choices.

First, he could ask for proof from the credit card company that he is responsible for the card. If they can’t prove it, then presumably they can’t take him to court and attempt to get a judgement against him.

Alternatively, he could offer to make payment arrangements.

Ultimately if they sue him it would be up to a judge to decide whether or not he is liable, and that will depend on the specific facts of his case.

Question: My husband will be filing for bankruptcy in Ontario soon and we’ve been told by our bankruptcy trustee that since he is secondary on my credit card that we can claim that debt to be covered as well (minimal outstanding balance). She assured us that this will not affect my own credit rating, but this sounds a bit fishy to me. Why, then, would he not be named on our other family member’s debts (line of credit, etc) so that theirs could be wiped out, too? And what affect will this have on my accounts?

Answer: If a husband and a wife are joint on a credit card, and the husband goes bankrupt, the husband is discharged from the debt; the credit card company can no longer attempt to collect money from the husband. However, the wife has not filed for bankruptcy, and therefore she remains fully liable for the entire debt.

More information can be found in our article entitled: Does Filing for Bankruptcy in Ontario Affect My Spouse?