Does my spouse own half my tax debt if I file for a consumer proposal?
Your personal finances are just that – yours. Similarly, debts that are only in your name are yours.
Your spouse, whether common law or married will not be affected by your consumer proposal or bankruptcy if he or she is not responsible for any of your debt.
Although your spouse is not responsible for your debts, there are some instances where your spouse may be affected.
Joint Credit Cards
Your spouse may be affected by your Consumer Proposal if you have any joint credit cards. (your spouse has their own copy of the card). If this is the case, once you file for a Consumer Proposal, your spouse will become entirely responsible for that debt.
If one spouse should refuse to pay, die, or file for bankruptcy, the other spouse is still responsible for that debt. If you file for bankruptcy and your spouse, has co-signed, or guaranteed a debt for you they will be responsible to repay that amount.
If you and your spouse own property together.
If all the property you and your spouse own jointly falls within the bankruptcy exemption limits set by your province then you don’t have to worry. However, if you own property that is over and above these exemptions, then your portion of these assets may have to be sold as part of the bankruptcy. This would clearly impact your spouse.
For the most part your debt is separate from your marital status.
The best way to determine if your spouse is in a position where they would be impacted by your filing for bankruptcy or a Consumer Proposal, is to meet with a Licensed Insolvency Trustee.
After a quick examination of the type of debts you have and the nature of the assets you own, your trustee will be able to identify any risks and explain exactly what your spouse can expect.
There will be no cost or obligation associated with simply asking questions and then you will have a qualified opinion that is based on the facts.
Talk to a professional at D. Thode & Associates Inc. today who can help you navigate these options and more.
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