If you are considering filing a consumer proposal to resolve your unsecured debt, you might ask: “does a consumer proposal affect my spouse?”
Well, here’s some peace of mind: unless you have shared debts, shared assets or own a house together, a consumer proposal doesn’t impact anyone else but you.
Will a consumer proposal affect my spouse or partner?
In most cases, a consumer proposal doesn’t affect your spouse or common-law partner.
Just because you are married or living together as common-law does not mean your partner is responsible for your debts.
Only the person filing the proposal is affected if the debts are solely in their name. This will not impact the financial situation of your spouse or partner, or impact your credit history or credit rating.
If you have shared debts with your partner, they are still responsible for repaying if you file a consumer proposal. If you share similar debts, you can file a joint consumer proposal.
Lastly, you don’t have to enter into a consumer proposal just because your spouse does.
Does my spouse’s income affect my consumer proposal payment?
If you decide to file a proposal, your spouse or partner will be asked to provide their income.
This allows your Licensed Insolvency Trustee to calculate your total household income and work out the monthly payments.
Your spouse or partner can decline to provide this information, but it makes it easier if they do.
If you have shared debts, such as a loan or joint credit card, a consumer proposal impacts your spouse or partner because each person is equally responsible for the debt.
Ultimately, the lender has the right to request payment from either person if one cannot pay.
So, if you file a consumer proposal, your spouse would be liable for whatever portion of the debt that remains after a consumer proposal.
If you’re not sure if your spouse or partner has responsibility for certain debts, you must find out before filing.
You can do this by checking your statements, calling the creditor or reviewing your credit report. By doing so, you know that the debts are solely yours.
Can you file a consumer proposal if you own a house together?
If two people have a mortgage together, the person filing the consumer proposal may owe creditors a portion of the equity in the house.
The person who is not filing keeps their share of the home equity, and this portion does not go to your creditors. This process may also apply to other assets, such as a vehicle.
Is there a consumer proposal for joint debt?
A joint consumer proposal is when two people enter into a consumer proposal as one filing because they share the same debts. To qualify, both parties should share equal responsibility for the majority of the debts in question.
Does a consumer proposal affect my spouse or common-law partner?
If you file a consumer proposal, your spouse or partner will not be affected unless you have shared debts or assets. If you have joint debts, it is possible to file a joint consumer proposal instead.
You must prepare and file a consumer proposal with a Licensed Insolvency Trustee.
Learn more about how your spouse or partner is affected by a consumer proposal or bankruptcy by arranging a free consultation with a Licensed Insolvency Trustee.
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