When divorce occurs, household expenses essentially double, which alters your current financial situation. Separation causes major money problems regardless of how much money someone makes or how well they managed their finances while they were in the relationship.

Support payments when facing financial difficulty

The financial responsibility of the child(ren) falls on both parents. If you do not have custody after a divorce, you may be required to make child support payments that are based on your income and the number of children you have.

In some cases, with or without children involved, spousal support (alimony) is required. Ontario law views spousal relationships as financial partnerships but when the partnership breaks down, the person with more income or assets may have to pay support to the other.

Sometimes, the additional financial strain is too much and requires the individual to make a consumer proposal or file personal bankruptcy. 

What happens to child and/or spousal support when you file personal bankruptcy or make a consumer proposal?

As the payor of the child and/or spousal support, filing personal bankruptcy or making a consumer proposal does not discharge or suspend the payments. You are not released from your child and/or spousal support obligation.

What happens if your ex-spouse is filing personal bankruptcy or making a consumer proposal?

As the one receiving the child and/or spousal support, your ex-spouse is required to continue to make the payments in the amount agreed on. If your ex-spouse is in arrears, you can submit a claim for the money owned, making you a ‘preferred creditor’ according to the Canadian Bankruptcy Law. A claim can be submitted for the support in arrears accumulated in the12 months prior to filing by your ex-spouse.

Separating from your spouse is hard enough without having to make sense of the legal and financial requirements not to mention the current debt issues you face.

At Welker & Associates, we offer you help through FREE consultations with our licensed trustees so you can better understand your options and get a fresh financial start.

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