When you lose your spouse, the last things you want to have to worry about are debt or whether your matrimonial home will be taken from you.
Spousal debt is a serious problem, and unfortunately, many seniors from the Baby Boomer generation don’t like to talk about their financial issues.
Unfortunately, not talking about them doesn’t make them go away.
When someone passes, their debt does not go away.
If your spouse recently died and you find yourself struggling with debt, you might be worried about filing for bankruptcy.
The concern most people have when it comes to bankruptcy is that it can affect your home, vehicles, and other assets.
In many cases, the living spouse wants to remain in the marital home, and you should be able to.
But, if you’re on a limited income or fixed budget and can’t afford to pay off the debts of your deceased spouse, you may be wondering what your options are.
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Assigning Your Estate Into Bankruptcy
Don’t let the “b-word” frighten you.
Assigning your estate into bankruptcy means handing over the authority to a Licensed Insolvency Trustee.
When you do that, it keeps the creditors from knocking at your door or threatening to take the estate.
You can trust a Licensed Insolvency Trustee (LIT) with your estate because they are licensed with the Superintendant of Bankruptcy in Canada.
Their goal is to help you with your finances, not to obtain any kind of personal gain.
If your late spouse had any other assets, you can use those assets to pay off the debts on the estate, before the title is signed back over into your name.
Once it is, the only thing you’ll have to do is pay the mortgage each month.
The home will be yours, free and clear, and you won’t have to deal with creditors.
Managing Debt After a Spouse’s Death
While assigning your state into bankruptcy with a LIT can be beneficial, you don’t have to file for bankruptcy just because you’re dealing with your spouse’s debt.
In many cases, a Consumer Proposal is a better option.
It will allow you to keep your assets (including the matrimonial home) and negotiate a fixed amount to pay off to your creditors.
In many cases, it can eliminate a large portion of your debt, and your creditors won’t continue to come after you as long as you stick to the agreed-upon payments.
When you’re dealing with the death of a spouse, you have enough on your plate to worry about.
Your marital estate and other assets shouldn’t cause you stress.
If you’re struggling with your finances or trying to manage your spouse’s debt, you don’t have to do it alone.
Contact Bankruptcy Canada today to talk more about your options when it comes to assigning an estate into bankruptcy, or finding other ways to pay off debt so you can still afford to remain in your home on a fixed income.
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How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?