Whether or not you can file for bankruptcy without affecting your spouse will depend on the debts that are owed. If you’re the only one who signed for the debts, then your spouse is not responsible for them (despite what any collection agencies may have told you). He/she will not have to be involved in your bankruptcy, and his/her credit rating will not be affected.
If, on the other hand, the debts you owe are joint—that is, you and your spouse both signed for them—then you are both responsible for them. This means that if you declare bankruptcy, your creditors can pursue your spouse for full payment of the joint debts, including supplemental credit cards (whether or not your spouse signed the original application form). In this case, it is usually best for both you and your spouse to file for joint bankruptcy.
In the case of divorce, joint debts cannot be divided in the same way that assets are. Regardless of any separation agreement, you both remain fully responsible for all your joint debts. Once again, this means that if one of you declares bankruptcy, creditors can go after the other for payment in full.
In short, you and your spouse are not responsible for one another’s debts based on your marital status, but rather on who signed for what. For more information, or to find out more about how bankruptcy might affect you and/or your spouse, call us now for your free, no obligation consultation: in Ottawa call 613-237-5555; out of town, call toll-free 1-800-517-9926 or book online.