difficulty with bankruptcy

[twice_bitten]

I am in a serious financial mess. Almost one year ago, My wife and I put a second mortgage on our home, used the proceeds to pay down credit debt, then wracked up credit debt again to invest in a business. The whole purpose of this was to provide gainful employment for my wife, who had quit her job last year because she was growing increasingly unhappy with it. The intent was to have the business pay off the credit debt over time, and eventually also the mortgages, and then have the business provide a source of income for us into retirement.

The idea was that I would cover household expenses until such time as the business reached a point where it could pay my wife a wage. I ended up borrowing money on my personal credit (about $3000 a month) to do this, and have been doing so for several months now. I had calculated that we could keep this up until about November, and had expected the business to be doing well enough to at least pay my wife a wage, which it did in October.

The problem is that my wife and I separated in August, she is still not contributing to the household expenses, and I have the added burden of having to pay rent and utilities on another place for my children (from a previous marriage) and myself.

I have been to three credit counsellors, and all three have strongly recommended filing for bankruptcy protection. Even without the mortgages, apparently I am looking at over 15 years of making payments of $2500 a month to pay off my personal debt, which obviously is just not an option.

My questions are:

1. How will this affect my separation/divorce? Could this possibly be seen as an attempt to cheat my wife? (She will amost certainly take it that way...)

2. How will this affect the calculation of potential support? (We were married 5 years and lived together for one prior to that.)

3. How will this affect my wife? We have no debts under our joint names other than the mortgages. Will she "inherit" my personal debts, seeing as they were all incurred during the marriage?

4. How will this affect our business? I know my interest in the business will probably have to be surrendered to the trustee upon filing, but what about my wife? And we have two other partners in the business also? How might they be affected? The business is a legally incorporated limited partnership, with a small business loan of $150,000 for which we have all signed individual personal guarantees. My personal investment in the compyany is around $65K.

Incidentally, my wife is also finally going to see a credit counsellor next week. Her personal debt is in the vicinity of $36,000, and with her current revenue, I suspect she will also be advised to file for bankruptcy protection. How will that affect me? And what if I end up not filing (which I would rather not do if I can avoid it)?

By the way, I have just missed my first mortgage payment, having used it to pay my rent, and I am moving into the rental unit over the coming week, as it will become very difficult to find lodgings if and when I declare bankruptcy, so I am better off keeping the place on which I already have a lease.

Any suggestions, advice or insight on any of this posting would be most appreciated.

[FL_Needs_To_Change]

law.bankruptcycanada.com

Sometimes going to the local chapters and searching their books for help on issues as complex as bankruptcy can also help.
Here is a link to an excerpt from one such book.


How to Get the Most Out of Your ... - Google Book Search