Bankruptcy and Your Spouse
1.0 Bankruptcy Trustee Statement: The bankrupt partners are liable to the discharge process jointly and are responsible to undergo the process together for the property/items owned jointly, even if their relationship no longer exists.
When a married couple lives separately, however, both of them declared bankrupt, they are both responsible for the accrued debt, even though they have lived separately
2.0 Bankruptcy Trustee Statement: If only your spouse is filing for bankruptcy, you do not need to provide your own information.
Personal information from a spouse is not required when filing for bankruptcy. However, total income is needed as part of the bankruptcy filing and to determine surplus income.
3.0 Bankruptcy Trustee Statement: 2 years after discharge from a join bankruptcy, the couple should be eligible to apply for a mortgage.
Really? Who wants more debt after being cleared of debt? However, the bankruptcy trustee is correct. Within 2 years, if certain rebuilding tactics are completed, the credit rating can be rebuilt to such an extent that credit is available. However, as expected, financial institutions will charge higher rates of interest.
Moneyandbusiness.ca recommends that no mortgage be taken. Rent a place to live in, save money and buy a house for cash even if it takes 10-15 years.
4.0 Bankruptcy Trustee Statement: If your assets are on your individual name and not jointly on your spouse name, your bankruptcy will not affect your spouse.
If one person is filing bankruptcy, the credit rating of the spouse is not affected.
5.0 Bankruptcy Trustee Statement: If you and your spouse jointly own a house and one of you goes bankrupt, the half part can be kept in the equity of the bankrupt partner and the other partner can purchase his stake from trustee in the house.
50% of the equity in the house will be required by the bankruptcy trustee. What this means is, the house will be put up for sale by the trustee, and the non bankrupt spouse has no say in that decision. If the non-bankrupt wants the house, they will have to seek financing to cover the entire cost of the mortgage. If that is not possible due to their income not reaching the level that is required for full mortgage approval, then the house will be sold. However, the non-bankrupt spouse will be given 50% of what is left after paying real estate commissions, lawyer fees and other expenses.