If I Do A Bankruptcy Can My Spouses Assets Be Taken

2011-01-16   minute read

 In general, if you do a bankruptcy and your spouse does not, assets that legitimately belong to your spouse cannot be seized in your bankruptcy. If you own something jointly, such as an investment property that is in both names, it is possible in a bankruptcy for the court to order that it be sold, even if your spouse doesn't want to sell it.  The court will not always agree to grant such an order - they will typically consider both your spouse's rights and your creditors' rights and order what they believe to be the fairest solution for all parties concerned.  If the court orders that the property be sold, your spouse would get her full 50% share of the proceeds - that cannot be taken to pay your creditors in the bankruptcy. If you transfer something of yours into your spouse's name and you then go into bankruptcy, the transfer would be considered void and fraudulent.  For example, let's say you had an RESP that was in both names and you took your name off, meaning that it was then in only in your spouse's name.  If you then did a bankruptcy, the transfer would be set aside and 50% of the plan value would be paid to your trustee for distribution to your creditors. The fact that a debt is joint with your spouse doesn't really change any of this.  There are a lot of variables, depending on the type of asset, whether the debt is secured or unsecured, and other things, but in most cases, your creditors don't have any right to take something that belongs to your spouse or another person and use that to pay your debts. I hope that helps. Judy A. Scott - Trustee Meyers Norris Penny Limited Port Moody - Burnaby - Maple Ridge, BC 604.949.2113 [email protected]

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