DYLAN ASKED: My credit card is in both mine and my dad’s name. Will including that debt in a consumer proposal hurt his credit rating?
The credit card that you have with your dad is a joint account. It doesn’t matter who is primary or secondary on the account; if two people have borrowed money together they are both jointly and severally liable for 100% of the debt.
If you file a consumer proposal you would have to include this debt. One of the fundamental principles of filing a consumer proposal in Ontario, is that you must treat all of your creditors the same.
By including this debt in your consumer proposal, it will:
End your legal obligation to pay the joint creditor.
Not affect your dad’s legal obligation to pay this debt.
Not affect his credit rating provided he continues to make payments.
To put this another way:
There is nothing you can do to affect your dad’s credit rating.
Your decision to file a consumer proposal does not affect your dad’s credit rating.
There is also nothing you can do to affect your dad’s legal obligation to pay his creditors.
Your dad is a co-borrower of this account and he is responsible for the debt.
Provided that your dad continues to make the required payments, or pays-off the debt, then his credit rating will not be affected by your consumer proposal.
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