If you are considering filing a consumer proposal to resolve your unsecured debt, you might worry that a consumer proposal may affect your spouse.
The good news is 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 doesn’t mean your partner is responsible for your debts.
If the debts are solely in your name, only the person filing the proposal is affected. It won’t impact your spouse or partner’s financial situation or your credit.
If there are shared debts, the other is still responsible for repaying if one files a consumer proposal. However, you can file a joint consumer proposal to erase shared debts.
You don’t have to enter 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 to calculate your total household income and work out the monthly payments.
Your spouse or partner can decline to provide this information, but it is 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, as each person is equally responsible for the debt.
Ultimately, the lender has the right to request payment from either person if one cannot pay. Your spouse would be liable for whatever portion of the shared debt remains after a consumer proposal.
If you’re unsure if your spouse or partner is responsible for certain debts, you must find out before filing. You can check your statements, call the creditor or review your credit report. By doing so, you know that the debts are solely yours.
You can file a joint consumer proposal if you share the same debts. Both parties should share equal responsibility for most of the debts in question to qualify.
If you file a consumer proposal, your spouse or partner will not be affected unless you have shared debts or assets. You can file a joint consumer proposal if you share debts.
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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