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  • Help - Issue with my Parents

    My mom and dad went their separate ways about 6 years ago. However, they never ever legally separated or divorced from eachother.

    Now my mother needs to file for bankruptcy. There are no credit cards or anything held jointly between them. So my question is if my mom files for personal bankruptcy will it affect my dad in any way?

    Sorry if this was already asked in another thread.

    Also, does anyone happen to know if creditors will go after my mom's CPP and GST cheques from the government?

    Any help is appreciated.

  • #2
    She needs to talk to a bankruptcy trustee and ask those questions. Creditors will not be able to go after your father if there are no jointly held debts.

    It will not affect his credit in any way.

    She will most likely lose the GST cheques, typically what happens is that the trustee will liquidate any assets (cash, RRSP's etc) for the creditors...then they also will take your income tax for that year, as well as any GST payments, etc.

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    • #3
      I declared last year. Best thing I ever did. Here in Ontario as long as your income stays below their guidlines, which for a single person is $1870 average per month, you'll only be bankrupt for 9 months. If you go over they'll take 50% of every $1 you make over the table amount for 21 months. GST is counted as income. Also if she owns a home that is worth more than she owes, that will be taken. She'll probably have to pay $200 a month or so for 6 months to the trustee and as long as RSPs haven't been contributed to in the past 2 years, they're safe. It's free to get a consultation, and I used Fontaine and Assosiates. They were very understanding and easy to talk to. Good luck!!!

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      • #4
        Wooo - That's complicated. With no separation agreement in place, they are both liable for debts incurred during the marriage (the wedding until the SA).
        That is why an early separation agreement is so important. Sticking your head in the sand is not the best policy.

        FN
        Last edited by FreeNow; 06-14-2010, 10:04 PM.

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        • #5
          Not true - they held nothing jointly and as long as the debts she has were accumulated after they separated it doesn't affect him, with or without a separation agreement which is easy to show. The only time it might come under scrutiny is if there was a disagreement on the date of separation.

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          • #6
            My friend just went through this and my understanding of it is this. If you mom declares bankruptcy because there is no legal separation the debts get dumped on your father. My friend had to also declare bankruptcy as he was unable to incur the large amount of debt on his own. This included selling the house, loosing credit cards, tax returns and so forth. He has to pay $200 per month and everything extra he makes they take half to be put towards the debt. This is for a couple of years I think. I guess it depends on how much debt you have whether or not if it is worth it.

            I pay my full support and how I kept my perfect credit rating I have no idea it has been tough go though. At least I know my children have been taken care of. Almost done I see the light at the end of the tunnel.

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            • #7
              My ex was threatening bankruptcy and so I asked my lawyer if I had anything to worry about. This was before we had a separation agreement. My lawyer said it wouldn't affect me at all.

              So my advice is, don't listen to us, we're all telling different stories. Get professional advice.

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