How does filing for bankruptcy in Canada affect my spouse: What Bankruptcy is
I recognize how challenging and difficult it can be to have massive financial obligations and battle to meet your regular obligations. This is especially true throughout this post-pandemic resumption of the Canadian economy. If you're tossing and turning during the night and remaining awake from worries, please contact us for assistance. A licensed insolvency trustee can provide the support and aid you require to return to the right track.
The term "bankruptcy" is something you'll hear a lot, but do you recognize what it really implies? Personal bankruptcy is the legal process through which a person can eliminate most, if not all of their debt. However, bankruptcy is not the only alternative. Under Canadian insolvency laws, you can prevent personal bankruptcy by filing a consumer proposal. If that ends up not being a reasonable option, then personal bankruptcy might be needed. Nevertheless, personal bankruptcy is constantly the last resort.
Even scarier is having to file bankruptcy when you are married or in a common-law relationship. That is why I want to provide you with information on how does filing for bankruptcy in Canada affect my spouse.
How does filing for bankruptcy in Canada affect my spouse: How bankruptcy affects you and your spouse
One way to relieve yourself from financial burdens is filing for bankruptcy. Filing for bankruptcy can help get rid of your personal debts. But what happens if one of you and your spouse files for bankruptcy? How does that affect the one who files and the spouse who does not file?
One spouse's assignment in bankruptcy will not usually affect the other spouse because spouses are allowed to own separate property in their own names. In addition, most secured debts such as car loans and mortgages are not usually impacted by bankruptcy.
Only the person who agreed to be liable for the debt can be affected by it. In most cases, one spouse is not required to pay the debts that are solely those of the other spouse when the other spouse files bankruptcy. If you have joint property, both spouses may be liable for the debt.
It can be really tough dealing with the joint property during bankruptcy, but don't worry- the law is on your side. Your Trustee will only take control of the bankrupt person's interest in the property, which means your non-bankrupt spouse's portion is safe.
Although joint property can be sold, the non-filing spouse's portion of that property must be returned to them. The non-bankrupt spouse would be the natural purchaser of the bankrupt spouse's interest in such property.
If you are filing for bankruptcy in Canada, I am sure that you are wondering how it will affect your spouse's income. Your spouse does not need to be a part of your bankruptcy. It is a common misconception that bankruptcy will directly affect your spouse's income, but this is not the case.
Although your spouse's income is not considered in a single spouse bankruptcy, it may be included in the calculation of your family's income and household expenses. This may determine if the bankrupt spouse has any obligation to make surplus income payments.
Finally, if you have any debts you both agreed to be liable for, including a credit card account in the bankrupt spouse’s name, and both spouses have their own credit card on that account. The small print in the cardholder agreement says that whatever amounts the primary cardholder does not pay, the supplementary cardholder is liable.
How does filing for bankruptcy in Canada affect my spouse: Determine if filing with your spouse makes sense
If the majority of your debts are common with your spouse, then it may make sense for both of you to file jointly together. If only one spouse goes bankrupt, the other spouse will be called upon to make the payments. If that spouse cannot afford to, then it makes sense for both of you to file jointly together.
How does filing for bankruptcy in Canada affect my spouse: How long does bankruptcy take?
Personal bankruptcy is a scary topic in Canada everyone's path to bankruptcy Is different. I try to answer the most frequently asked questions to lower your stress level and give you good information.
For a person who is bankrupt for the first time if they do not have what is called surplus income, they are entitled to a discharge after nine months. If they have surplus income it becomes 21 months.
If it is a second time or more personal bankruptcy the timeline is extended to either 24 months or 36 months depending on surplus income.
This assumes that you do not owe the Canada Revenue Agency $200,000 or more of unpaid income tax in the bankruptcy and that you have fulfilled all of your bankruptcy duties.
How does filing for bankruptcy in Canada affect my spouse: Find out if filing is right for you
Filing for bankruptcy may feel like a daunting and difficult process, but with the appropriate knowledge, it can be much simpler as well as much less frightening. There are lots of advantages to filing, yet understanding all the aspects of your prospective bankruptcy before you file can create a much smoother process.
There are lots of advantages to bankruptcy, yet it is very important to understand all the details before you file an assignment in bankruptcy. I provide a free consultation to anyone who intends to discover more regarding their alternatives in dealing with their debts. I'm happy to explain all the details and assist you to make the most effective choice for your scenario.
If you're considering bankruptcy, please contact me so we can work together to figure out the best option to eliminate your debt and stress.