Spouse filing for bankruptcy

[mom2three]

That is something we are aware of. For the sake of my kids, I'm a little concerned as to whether she has either given complete information or received correct advice. While it has been 7+ years since graduating college (ie: ceased to be a student), she has been taking distant education courses through a university to advance her career. It was previously explained to me that this would reset the 7 year clock. Or has that changed?

I would be curious as to who advised the 'reseting' of the clock. After doing a search, it would seem that the following case is the precedent that determined that the clock does NOT begin anew upon return to education. The decision has been followed a few times and nothing indicates that a higher court overturned it:

CanLII - 2005 SKQB 75 (CanLII)

You don't indicate that your spouse used loans for her second crack at an education. If she did, that would be a whole other ballgame.

One thing to note that is interesting about the case is the fact that while the clock had ran its course and she COULD have been wholly discharged from the debt, the court thought that she had the ability to pay some funds towards the loan. SHe did not get the full discharge and was required to make payment and would not get an absolute discharge until the amount was satisfied.

Bankruptcy can have serious consequences and those ought to be considered before making an assignment in bankruptcy. It sure isn't the easy way out.

[Dazed_and_confused]

My understanding is that the clock starts when you are at the point where you must start repayment. If her ongoing classes were enough to maintain her student status and OSAP payments were still covered by the goverment - we don't think of it, but the goverment is covering the interest payments until we graduate - then 7 years wouldn't have elapsed.

Here is an article that summarizes my understanding of student loans and bankruptcy: Trick or Treat? ? How do I know that my student debt will go away if I file for personal bankruptcy in Toronto? - Bankruptcy Toronto

I don't care if she makes a mistake that comes back to bite her in the ass, but I am concerned about my kids.

[Dazed_and_confused]

I would be curious as to who advised the 'reseting' of the clock. After doing a search, it would seem that the following case is the precedent that determined that the clock does NOT begin anew upon return to education. The decision has been followed a few times and nothing indicates that a higher court overturned it:

CanLII - 2005 SKQB 75 (CanLII)

I am familiar with that one. I am by no means an expert in law, but as I understand it this was a Provincial court decision and is not binding on other provinces. The following link (if I remembered to do this right) is a good summary of my understanding of the 7 year issue:

Trick or Treat

[hadenough]

^ for some, it is a very "easy way out." And with a shady trustee to assist, and a useless federal regulator it is actually very easy.

The OSB is USELESS - they are a bunch of overpaid, ass-covering, buck passing tools. OSB should stand for Office of Supreme Bullshit.

[Dazed_and_confused]

Something else just occurred to me; as we have do not have any separation agreement in place and have not done the equalization process I'm wondering how the bankruptcy will affect that? It was my plan to get in touch with a local lawyer when I returned home to get this agreement started since she hasn't done anything at all (other than ask when I will pay child support and how much).

There is a good possibility that I may have been owed something, and the only tangible asset she would have had to make that payment is her defined benefit pension plan. Does bankruptcy wipe out this possible debt? The only tangible asset she would have had to pay with is her defined benefit pension plan (which is excluded from bankruptcy).

Sorry for the questions, but it seems that just as I handle one thing, I get 2 more thrown at me. While I am fortunate to have help from family and friends, there are some things they have little or no knowledge of.

[arabian]

First of all start reading up on the bankruptcy act. It is under government website.

If your ex has not gone into bankruptcy try to stop her or at least get her to pause. As hadenough mentioned in her post, MANY bankruptcy trustees are simply people off the street who have taken a 3 yr rinky-dinky course. They are not all CA's - far from it. It is a very, very big business. Trustees talk people into going bankrupt all of the time, even though they have many other options and can likely pay off their debts. There were changes in the bankruptcy laws in the past 2 yrs and many trustees aren't even aware of these changes and continue to give very poor and invalid advice to people. One change was that bankruptcy now stays on your credit rating for 14 yrs (not 7).
Check out the other change in the act regarding RRSP's etc.

She is wiping out her personal debt and leaving you holding the bag. Welcome to the club. No fun whatsoever. My ex has told me on many occasions that the decision to go bankrupt was one of the things he regrets. He says he was pressured by lawyers to do this. My ex is a 'blamer' but somehow I am not at all surprised by this statement.

My opinion is simply that bankruptcy trustees are pretty much all scum of the earth, uneducated, self-important assholes who take great pleasure in destroying peoples lives. If your ex is insistent on going bankrupt I would suggest directing he towards a more credible company that actually employs chartered accountants.

Good luck - you are certainly going to need it.

[arabian]

I can't emphasize enough how important it is to read up on the bankruptcy act.

[mom2three]

Dazed and Confused:

Wow, bankruptcy will be the least of your concerns. I didn't (and I am sure the others who have chimed in) didn't realize there were kids involved!

What are your plans??? You need to get your derriere back into YOUR home and pronto.

[arabian]

^Unfortunately the ruins caused by bankruptcy linger on after equalization, child custody and divorce are resolved. It is simply a loser's quick-fix. Very cowardly act.

[Dazed_and_confused]

I can't emphasize enough how important it is to read up on the bankruptcy act.

I have read quite a bit on bankruptcy, but didn't see much definitive in regards to equalization. But just found a couple news items form a few years ago that answered that question.

So now I will be looking closer at the student loans issue; if she won't be discharged she may re-think because it will be no benefit to her. In any event, I will be looking to get spousal support from her since she was the much bigger earner and there is no way I can afford to live if I have to pay the amounts she wants. I made a lot of career and personal sacrifices over 20+ years and I won't just sit still and take it.

[arabian]

Get an interim order immediately. In the order have the mortgage payments and other things that she would have normally paid for included. One thing the judges do look at is if someone is going bankrupt (wiping out their financial responsibilities) they are in a much healthier position to pay substantial SS. I know if my ex had known that he would never have gone bankrupt.

Hope she changes her mind. To go bankrupt for a few credit cards is totally ludicrous but not surprising. Bankruptcy trustees are notorious for giving shit advice.

[Dazed_and_confused]

Dazed and Confused:

Wow, bankruptcy will be the least of your concerns. I didn't (and I am sure the others who have chimed in) didn't realize there were kids involved!

What are your plans??? You need to get your derriere back into YOUR home and pronto.

That is perhaps the ONLY area where my ex is being decent; she is not trying to keep me from the kids, which surprises me after the recent turn of events. Remaining in the home was simply not a palatable option, as I was expected to simply be there to make her life easy and hand over most of my money. As it turns out, her timing was a little off. I received a decent tax refund, and have 2 very good end-of-year bonus payments from work, so I'm not poverty stricken at least.

[mom2three]

That is perhaps the ONLY area where my ex is being decent; she is not trying to keep me from the kids, which surprises me after the recent turn of events. Remaining in the home was simply not a palatable option, as I was expected to simply be there to make her life easy and hand over most of my money. As it turns out, her timing was a little off. I received a decent tax refund, and have 2 very good end-of-year bonus payments from work, so I'm not poverty stricken at least.

YET!! Your choice but I am sure the others will chime in about the absolute necessity of returning back to your home. She may be decent now but until the two of you have a signed agreement in place you need to get back in there.

GO HOME. GO HOME. GO HOME. If that is unpalatable then you need to be researching the boards about the possible outcomes of moving without an agreement in place.

[Dazed_and_confused]

Hope she changes her mind. To go bankrupt for a few credit cards is totally ludicrous but not surprising. Bankruptcy trustees are notorious for giving shit advice.

I think she received shit advice here. Once the house had been sold, all she would have left is her student loans (well, and the car). There are no other credit cards, etc. She wouldn't be able to live the previous lifestyle, but she could have managed. It's like she has once again chosen the Nuclear option to deal with things.

[arabian]

What you have to do is mitigate your financial damages as quickly as possible. If no one is going to be able to afford the house then it would be logical to put it on the market. Banks will move very quickly to foreclose once payments have lapsed 3 - 4 months. Bank simply gets an order for sale (5 minutes in court).

Sounds like your ex is very young and naive - an easy assumption based on what you have outlined. Since you have moved out and have now proven you have another place you can stay temporarily, your chances of getting interim possess on the matrimonial home are pretty much zero. If anything, she very well might try to make that move. If she has the children living with her then she will likely succeed. What I recommend you do is try to get together with her and talk some sense to her. Once she gets to her lousy lawyer and/or trustee they will have her totally convinced that a life with no credit for 14 yrs is well worth the jump to bankruptcy.

Did the two of you have an accountant that you both got along with and trusted? Might be an idea to get her to agree to meet with this person in a no-blame, lets-get-money-figured-out sort of meeting. Next, assuming the house has to be sold, you can try to get her to agree on an agent and then selling price. I'd get this off the table before the house is used as leverage in child custody. Posters on this forum will tell you from experience that everything starts off quite friendly. After your stbx meets up with her friends, lawyers, relatives the atmosphere changes quickly.

None of us going through divorces like the fact that our lifestyles will change drastically. It is a reality unless you are extremely wealthy.

You mentioned that this whole situation came as a surprise to you. Do you feel there is any possibility for reconciliation? Are the current problems merely financial or is there someone else in the picture? Financial problems can be resolved with financial counselling. Too often young people get in over their heads financially at the start of their marriage.