Divorce and Bankruptcy Archives - Page 3 of 4

How is my spouse affected if I go bankrupt?

Posted on January 7, 2015April 16, 2016 by Jordan Rumanek

How is my spouse affected if I go bankrupt?

Your spouse will not be legally affected by your bankruptcy just by virtue of being married to you. One spouse is not liable for the other’s debts, unless he or she has agreed to pay them by co-signing or guaranteeing the debts. Assets exclusively in the spouse’s name will not be part of the bankruptcy.

There are several other things to consider:

If he or she has a supplemental credit card, there may be liability for the amounts spent on the supplementary card.

If assets have been transferred to the spouse’s name, the trustee will have to investigate the timing and circumstances of that transfer.

If assets are in both names, your Trustee will talk to you about your options in respect of those assets (and you usually will have options).

If your loans have been co-signed, your spouse will have to consider the options available for dealing with the creditors.

Also, remember that your not having credit cards will affect your family spending habits. Talk to your spouse about making positive changes in your financial lives.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Co-signers and Debt

Posted on September 16, 2014April 17, 2016 by Jordan Rumanek

Co-signers and Debt

A co-signor is someone who, at the time you obtained your credit card or obtained your loan, agreed by way of signature to pay the bank if you were unable to do so. Co-signing makes the loan a joint one, meaning that the entire amount must be repaid by either person, doesn’t matter which.

If you file for bankruptcy, you relieve yourself from the obligation to pay back your debts. Your bankruptcy does not relieve someone else from their obligations, even those made on your behalf. In other words, if your parent signed with you for a car, or your spouse co-signed your credit card, they would be liable to pay the amount owing in full.

Who Pays My Bills When I Die

Posted on April 15, 2014April 17, 2016 by Jordan Rumanek

Who Pays My Bills When I Die

Hopefully, you will have made a will which appointed an executor to handle your final wishes. The executor after arranging for and paying for the funeral and burial costs will use any funds that you have to pay any of your outstanding debts and thereafter, will pay the beneficiary of your will any remaining funds. If there is no will than a close family member or friend will have to hire a lawyer to have a court appoint an executor to handle your affairs. For more information, please go to the website of the Canadian Institute of Certified Executor Advisors – www.cicea.ca.

If there are not enough funds to pay your debts after you die, there are several options. If the debts are substantial, there is a provision in the Bankruptcy and Insolvency Act to have a deceased estate placed into bankruptcy. This requires a meeting with your lawyer (who must obtain a court order to start the bankruptcy) and a trustee in bankruptcy (who will administrate the bankruptcy). If there is no funds in the estate and you do not mind getting the phone calls and letters from collection agencies, you do not have to do anything, except perhaps explain that the person has died.

Under no circumstances is any person liable for the debts of another person unless you signed the original application form as a joint applicant or signed any document since the original application. I have heard many stories over the years of collection companies telling a wife, husband, father, mother, son, daughter, etc. that they are responsible to pay the debt owing for the person who passed away. This is not true. You are not liable to pay anything. The person at the collection agency is on commission – he or she will say anything they need to in order to induce you to pay the outstanding account. The only person you are helping is the collection person at the other end of the phone who earns a commission if they get you to make a payment.

Divorce and Bankruptcy

Posted on January 2, 2014April 20, 2016 by Jordan Rumanek

Divorce and Bankruptcy

Dear Trustee,

My husband and I have been separated for close to a year and a half. We will officially be divorced in 6 months if all goes as planned. We had our lawyers file a separation agreement and we have divided all of our assets. The house is now officially in my name but my soon to be ex-husband recently told my lawyer that he has decided to file for bankruptcy. This process confuses me and I am worried this may affect my assets in some way because we are not yet officially divorced. Because the house was put into my name only in the past year, does this mean that half the house could be an asset of his he is required to turn over to a trustee? I fear I will lose my home and I need your advice. LM

Dear LM,

Separation and divorce questions regarding bankruptcy are always case-by-case and it is advised to discuss these questions with a trustee in bankruptcy. It may be important to make sure you are the sole person on the title of the house. You should have your lawyer do a title search to make sure all documents are properly signed and registered. Set up an appointment with your bank to find out what joint accounts you have with your soon to be ex-husband. It is important to have this information for your safety because if your ex does file for bankruptcy and then gets discharged after a period of time, you do not want to end up responsible for any outstanding joint debts. Make a list of all questions that you have and set up an appointment with a trustee in bankruptcy in order to ensure you know and understand your rights. With respect to the house, the trustee will need to know its value on the date of the transfer as well as the amount of the mortgage debt that you assumed. You should also determine if your ex-spouse is still liable on the mortgage.

Tag: Divorce and Bankruptcy

How is my spouse affected if I go bankrupt?

How is my spouse affected if I go bankrupt?