I have many married couples ask me if one spouse can file bankruptcy without it affecting the other. The answer always depends on their personal situation.
Many people have the mistaken impression that because they are married, their spouse is automatically responsible for their debts. This is not the case. The good news is, in Canada, marriage alone does not make you responsible for your spouse’s debts.
You can only be held responsible for a debt if you have signed a contract, loan agreement or credit card application.
Therefore, a credit card account started by your spouse while they were single does not become your legal responsibility just because you’re married. On the other hand, a joint credit card account or mortgage you’ve both signed for is a joint debt, meaning both you and your spouse are on the hook and the bankruptcy of just one of you will leave the other with the debt.
Think of any debt that you have as your debt only and the responsibility of it solely yours. Therefore if you’re preparing to file bankruptcy without your spouse, your joint debt will become your spouse’s full responsibility.
When I meet with couples that are in financial difficulty, I think it is important to look at each spouse as an individual and the family as a whole. Therefore I would strongly recommend reviewing your entire family debt situation to insure that the options you choose allow your entire family to get a fresh start.