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Hamilton (905) 769-2005

The Effects of Bankruptcy on your Spouse

While wedding vows traditionally include a commitment “For richer and for poorer”, it doesn’t mean that your personal Bankruptcy should wreak havoc on the finances of your significant other.

The effects of Bankruptcy on your spouse depend on the type of debt in question:

Declaring Bankruptcy with Individual Debt

Most people maintain and manage their own personal finances. Credit cards, bank loans, car payments—most of these obligations are attributed to a single individual, often initiated before they are even married.

If a debt is in your name alone, creditors cannot pursue your spouse for payment. In this case, you can continue with standard Bankruptcy proceedings to absolve the debt.

Declaring Bankruptcy with Joint Debts

Joint debts are where spousal Bankruptcy can become problematic. Any debt accumulated under a joint account, such as a joint credit card or a co-signed car lease, is entirely the obligation of both parties. If one party is unable to pay their share of the debt and files for protection from creditors, the second party is still expected to pay the full outstanding amount.

In this case, the entire debt remains, with its terms of repayment unchanged.

The Reality of Matrimony

Many couples have a combination of both individual and joint finances. As a rule of thumb, anything that is associated with a joint account, such as credit cards, mortgages, or any co-signed agreements will not be discharged as a result of one spouse’s personal Bankruptcy; the other spouse will still remain accountable for making all outstanding payments.

There is a benefit to such joint obligations. Since the debts are still being paid off, the associated assets will not count towards your Bankruptcy exemptions, and are not in danger of being repossessed.

Make an Informed Decision

Bankruptcy can place enough strain on a relationship without any unwelcome surprises. If you or your spouse is considering Bankruptcy, contact us today for a free consultation.

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Consumer Proposal vs Bankruptcy

Can You Relate?

When it comes to debt, particularly high-interest debt from credit cards, a few missed payments can often become a slippery slope towards out-of-control debt.

Minimum payments barely cover the interest. If those minimum payments are missed, or if you need to go further into debt to pay them, it’s time to get help.

Nobody likes dealing with constant harassing phone calls or late payment notices. if you can’t afford to pay off all your debts, they won’t stop until you take action.

Often, wage garnishments from a creditor just compound the problem, and make it even more difficult to pay off your other debts.

Get A Fresh Start


It’s time to take back control of your life.
Call us today at (416) 927-7200 or fill the in the form below and book your free consultation.