Howard Hayes Bankruptcy Cambridge Blog: October 2008: Answers to Personal Bankruptcy Questions

If I go bankrupt, will my spouse also have to go bankrupt?

This is one of the most common questions I come accross here in our Cambridge office when somebody is considering filing a bankruptcy. People seem to think that because you are married, you must go bankrupt together. However, whether or not your spouse will need to file bankruptcy with you depends on your individual situation.

In general, when you get married whatever debts you had to your name remain yours and yours only, so if you file bankruptcy in order to have them cleared it will have no effect on your spouse.
In the event that your spouse has co-signed or guaranteed any of your debts or if they hold a supplementary credit card on your account, they may need to file for bankruptcy also.

When the creditors find that they are unable to get the money you owe to them from you, they will go to your spouse to get if their name is also on the debt. If your spouse cannot make the payments either, then they too will have to look at options to deal with the debt including filing for personal bankruptcy.

Be careful for credit card companies that say supplementary card holders are responsible only for the charges that they put on the card. It is often too difficult for them to tell who made what charges and so they will try to make your spouse pay the entire amount.

If neither you nor your spouse can make the payments on debts which have both your names on them, you may need to file a joint bankruptcy. If you would like to learn more about filing a joint bankruptcy or would like information on alternatives to bankruptcy such as a consumer proposal or credit counselling and if you are unsure whether your spouse is going to be affected by your debt troubles, call me today at 519-622-3773 or send an email and I will be happy to answer any of your questions.

Living in Cambridge and surviving the global economic crisis

The past few months have been one of increased turmoil in the financial markets.
As each day passes we continue to read reports and see on the news and Internet, changing developments in the world markets.
In the United States, it seems every week we are hearing about one financial institution after another filing bankruptcy proceedings, being nationalized or being taken over. The latest of these was Washington Mutual, one of America's biggest mortgage lenders which had assets valued at over $300bn. It was sold to rival JP Morgan Chase for $1.9bn.

What does this all mean for me in Cambridge?

If you're currently investing in the stock markets around the world, you'll be seeing the value of your investments tumble as uncertainty around the world is leading to sale after sale of shares.

Even if you're not investing in the stock markets, the effects that today's problems will cause might not be immediate but will be felt over the coming months/years as leading Canadian economists are predicting we may be heading for a recession. Even if Canada escapes the worst of the worlds economic problems, our biggest trading partner, the United States likely won't. So therefore if people in America are not buying Canadian products, then Canadian companies won't be selling. If they are not selling, they don't need as may staff members and layoffs may be imminent. The more Canadians that then get laid off will result in more local business suffering as Canadians tighten their purse strings.

Another impact on Canada could result from the credit freeze the banks have imposed on each other. Again local business that used to rely on a $100,000 credit line from their friendly bank might be surprised later this year or next year when the banks cut or reduce credit facilities to companies. If the business cannot borrow money to buy products, and no products are in the stores to sell... again, more potential for layoffs or closures.

I don't know if it was coincidence or not but I was walking around the Cambridge mall last Saturday and noticed at least three stores had closing down sale signs in the windows.

One other area for concern would be if the banks decide to lower personal credit limits. If you have a $10,000 credit line, the banks (as they have the right to increase your credit limit) have rights in some situations to cut the limit to say $8000. If this happens to you, is the balance on your credit line less than the new limit of $8000? If not, can you afford to pay the extra interest the bank will likely charge you for now being over your new limit?

Eliminating debt worries by filing a consumer proposal or personal bankruptcy might be a way to regain some control over your finances as well as having a plan to help prepare for potential 'worse case' scenarios.

If you are worried about how these uncertain times might be effecting you now or in the future, get professional advice and call us here at Hoyes, Michalos & Associates. On thing we can all count on in these uncertain times is the need to be prepared and the need to have a plan.
Call me at 519 622 3773 or email me with your questions

Welcome to the Howard Hayes Bankruptcy Cambridge Site

Posted on Thursday, October 30, 2008

If I go bankrupt, will my spouse also have to go bankrupt?

Posted on Monday, October 06, 2008

Living in Cambridge and surviving the global economic crisis