What many people want to know is whether or not bankruptcy affects spouse. Here is what you need to know in regards to the spouse in bankruptcy question.
In most cases, your debts are your debts, and nobody else’s. Only you are responsible for them. Your husband or wife or common law spouse is normally not responsible for any of your debts.
Assumption that your spouse is automatically responsible for your debts generally comes from collection agents, who while collecting debts will tell you that if you don’t pay, they will go after your spouse for payment. This is only a scare tactic; they can pursue only you for your debts. Your bankruptcy does not affect your spouse unless the debts are mutual.
The only time a bill collector can come after your spouse, is if the spouse co-signed or guaranteed your debt. For instance, if you took out a loan, and had your spouse co-sign for it, if you do not pay, that bank could pursue your spouse.
It is very common for a spouse to get a supplementary credit card for their partner. Even if the spouse never signed the credit card application form, if they have a card with their name on it, and if they have used the card, they are responsible for the whole debt and a bankruptcy will affect the spouse as well.
It is possible for your spouse to be indirectly affected by your bankruptcy, in the sense that you might not be able to qualify as a co-signor in the future.
In case of separation, even if your separation agreement says you will each take care of half the debt, if one person doesn’t pay his/her half, the creditor could pursue the other person for the total amount. You do not each owe half of the debt. It is a 100% split if either of you do not pay.
If you feel that your concerns and questions about what happens with spouse in bankruptcy are not addressed in enough detail and would like more information on the matter, please contact our bankruptcy trustee in British Columbia today and arrange for a free, no-obligation, consultation.
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