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Filing for Bankruptcy in Vancouver: How It Affects Your Spouse

Wednesday, January 10, 2018

When you are struggling to manage your finances, you might consider a variety of options. Sometimes, filing for bankruptcy is the best choice; although, it should always be the last resort. If you are insolvent, you may be contemplating this strategy.

One important detail to keep in mind is how such a plan of action will affect your spouse. According to the results of an economic study, 40 percent of Canadian marriages start off with financial debt. As a matter of fact, numerous couples begin their new lives owing more than $20,000. Former students may incur the highest amounts, but many couples in their 40s and 50s have an average of $19,000 in debts upon entering into marriage.

Bankruptcy in Vancouver British Columbia

What does all of this mean for people who are married, planning to get married, or are in the process of getting separated or divorced? If you are currently getting debt help in Vancouver, this is a topic that should be of some interest to you.

If You Are Married or Planning to Marry

The more that you know about the bankruptcy process, the more you will be able to make an informed decision. If you are presently planning a wedding or are married, you should know that in some cases, financial obligation does affect your spouse.

Consider these points:

  • Your Debts: First, if you owe money, your spouse is not necessarily indebted, as well. Your partner does not legally take on the responsibility to your creditors unless he/she has guaranteed or co-signed for a loan.
  • Credit Cards: The same principle is true of credit cards. If yours are all in your name, your spouse need not pay them. If you have credit cards for a joint account, however, then you are both liable. Also, if your spouse has a supplementary card in his/her name, but it is tied to a joint account, they could be held responsible for the charges incurred on the entire account.
  • Indirect Impact: While your partner in marriage may not be jointly indebted to various creditors, he/she may still be affected by your insolvency. If you must file for bankruptcy, you may find it very difficult to obtain credit for some time. This can impact your spouse because you might not be able to co-sign for a loan. As you rebuild your credit, you may both need to put off important purchases and decisions.

Debt Management When You Are Getting Divorced or Separated

If you are contemplating a separation or divorce, you should be aware that you may have a more difficult time once you are paying bills as a single person. In fact, a split could actually cause you or your spouse to become insolvent, although you might not have been previously.    

Dissolving your marriage is sometimes the best or only choice you can make, however. In such cases, remember that bankruptcy and owing money can also have an effect on your divorce.

Here is what you should know:

  • Joint Debt: Charges that you would have both been liable for during your marriage are still jointly owed after a divorce. The only exception would be if a creditor chooses to absolve one of you from paying the bill.
  • Child Support and Alimony: Legal insolvency will not apply to alimony or child support payments. You or your spouse must still pay these after filing for bankruptcy. In fact, one of the terms of your divorce might be that you or your spouse can keep specific assets if payments are made. Those payments will not be eliminated after a divorce, but the assets will likely be lost when you go legally bankrupt.
  • Joint Bankruptcy: Even if you are separated or divorced, you can still file for bankruptcy together. If you cannot pay your debts as a couple because of the split, you may need to apply this strategy.

Stay Informed and Get the Debt Help You Need in Vancouver

You do not need to face your debt issues alone. Whether or not you are thinking about bankruptcy as an option, the knowledgeable professionals at Abakhan & Associates Inc. can offer expert assistance. Our team offers a variety of services to help you meet your financial obligations or file for legal insolvency.

Contact us today to learn more about you bankruptcy options in Vancouver. We can review your debts and help you to make the best decision possible. Call us at 877-308-8877, or feel free to contact us online.

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