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If I file for bankruptcy, will it affect my spouse?

No. A bankruptcy or consumer proposal will only affect the person filing and will not directly affect the spouse’s credit rating in any way.

Many people believe that when you’re married, or in a common-law relationship, your debts become joint with your spouse. This is simply not the case. Your spouse or partner will only become responsible for the debt if they have co-signed or guaranteed your debt(s). For example, if you took out a loan and your spouse also signed onto it, it is also their loan for the full amount.

If your spouse has a supplementary credit card on your account, pursuant to some cardholder agreements your spouse may be held responsible for the whole amount outstanding if they continue to make purchases with the card. Further, if you have joint debts with your spouse including joint credit cards, loans or lines of credit, your spouse may be responsible for paying the whole balance of that debt if you were to file a consumer proposal or bankruptcy.

We encourage you to explore your contracts and agreements to determine whether or not your debts are joint with your spouse.

It’s important to keep in mind that there may be an indirect impact on your spouse if you want to jointly apply for credit in the future. Because your credit rating is impacted, a future loan or mortgage may be subject to a higher interest rate.

A Licensed Insolvency Trustee will be able to help you determine if your spouse will be responsible for any of your debt.

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