We often get asked – what happens to my spouse if I file for bankruptcy?  Marital status and debt are two separate issues. However, one can have an impact on the other.  If you are considering filing for bankruptcy, your spouse or common-law partner is not responsible for your debt unless the debt is registered in both names, or they guaranteed/co-signed your debt. By co-signing, your spouse is basically guaranteeing that if payments are not made, then they will make the payments on your behalf.

Credit cards are a good example.  It’s a common practice to issue supplementary credit cards to your spouse.  Although the account may be opened under you as the primary card holder, your spouse will be responsible for any charges they made on the card.

If there are debts in common, then you may want to consider filing a joint bankruptcy.

Be cautious about collection agencies. If your debt has gone to the collection phase and agencies are calling, they may use the tactic of trying to get you to make a payment by saying they will go after your spouse. Don’t be bullied.  If this happens, your spouse should request proof that they are responsible for the debt.

If you’ve determined that you are solely responsible for your debt, then realize that there is still an impact on your spouse. There are established guidelines based on family size and income that determines the surplus income payments you must pay into your Trustee.  The calculation is supposed to be based on the full family unit income which includes your spouse’s income.

Whatever your situation, it’s a good idea to meet with a trustee in bankruptcy to determine the best solution to deal with your debt.  Bring your spouse along so they can obtain the necessary answers as well.