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Personne travaillant a un bureau

Are you considering taking steps to eliminate some of your debt but are worried about how that might impact your spouse? At Bernier & Associates our licensed insolvency trustees in Gatineau and Ottawa offer multiple financial recovery solutions, including debt consolidation. Keep reading to learn what happens to your spouse when you make a consumer proposal or file for personal bankruptcy.


Understanding your debt

To determine if your spouse must pay for your financial obligations, you must first understand your debts and those of your partner. They’re divided into three categories: your personal debt, your spouse's personal debt and your debt as a couple.

The first two categories mean that only the person who incurred the debt is responsible for paying it. The other person isn’t required to pay those debts unless they co-signed for them. However, since your debts as a couple are in both your names, you’re both liable to repay them. For example, if you cannot repay the debt on a credit card taken out in both your names, creditors will automatically turn to your partner for repayment.

Creditors will never contact your spouse for debts incurred by you alone.


Impacts of a consumer proposal

A consumer proposal, which enables you to reduce your debts, will only affect your spouse if you have joint debts. In this case, your spouse will have to repay the entire amount of your shared debts, minus what you pay with your consumer proposal. Therefore, this process won’t protect your partner from collection measures.

If your debts are very high, it might be advantageous to consider a joint consumer proposal, including your personal debts and the debts you’ve incurred as a couple. Each partner may want to consider making an individual consumer proposal.


Repercussions of bankruptcy

Depending on the severity of your financial situation, you might want to consider filing for personal bankruptcy. Like a consumer proposal, the impacts depend on who’s liable for the debt. Your spouse isn’t required to pay for your personal debts but will definitely be impacted by the debts you’ve accumulated together.

A joint bankruptcy could be worth considering.

You can trust the advisers at Bernier & Associates in Gatineau and Ottawa to evaluate your financial situation. They’ll help you decide whether debt consolidation, a consumer proposal or personal bankruptcy is the best solution for you. Contact us today for more information.


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