Marital Splits Joint Debt And Bankruptcy

2008-11-05   minute read

Hello, If one person in a relationship files for bankruptcy and the other does not, there should be no impact on the non-filing individual with respect to their credit. The real issue here is whether or not you are a co-borrower or guarantor on any of the bankrupt’s debts. If this is the case, the creditor will pursue you for the full amount owing on the joint-debt. Collection efforts undertaken against the bankrupt spouse or ex-spouse will cease because there is a stay of proceedings in bankruptcy that prevents the creditor from continuing their collection efforts. While legislation varies by province, a first-time bankruptcy is typically on your credit history for six years after you are discharged. There is no hold on one’s credit for six to seven years, but rather the fact that your spouse or ex-spouse has filed for bankruptcy is documented for this length of time by the credit bureau. His or her bankruptcy should not affect your credit, however, you will be impacted if you are a co-borrower or guarantor on his or her debts. Brad Milne Trustee in Bankruptcy Brandon, Manitoba

Consultation icon