How Does My Partner’s Bankruptcy Affect Me?

Understanding Partner’s Bankruptcy and its Impact

Bankruptcy is a legal status that both individuals and businesses can declare when they’re unable to repay their debts. But what happens when it’s your life partner who is declaring bankruptcy? How does it affect your financial standing? This article aims to delineate the intricacies of the How does my partner’s bankruptcy affect me? situation.

Scope of Impact

First and foremost, your partner’s bankruptcy impacts you directly if you share joint debts. A joint debt is any debt that both you and your partner are obligated to repay. For instance, if both of you have signed for a loan or a credit card, you are both liable for its repayment. In the event your partner declares bankruptcy, the responsibility to repay the entire debt falls on you. This holds true irrespective of whether you are married, divorced, separated, or in a common-law relationship.

Credit Rating Implications

Your partner’s bankruptcy can affect your credit rating if you have joint debts that you are unable to pay off. If the debts are solely in your partner’s name, your credit rating remains unaffected. Post bankruptcy, your partner will possess the lowest possible credit score (R9), making it challenging to secure a mortgage or any other loan in the future jointly.

Impact on Home Ownership

If you solely own your home, your partner’s bankruptcy will not impact it. However, if the home is co-owned, your partner’s creditors can claim their share of the equity. This might necessitate the sale of your house to repay the debt. Alternatively, you could buy out your partner’s share of the home’s equity, ensuring the creditors receive their due without having to sell the house. This rule also applies to a matrimonial home.

Surplus Income Payments

In bankruptcy situations, both partners’ incomes are combined to determine if the bankrupt partner needs to make surplus income payments. If your combined income exceeds the bankruptcy guidelines, you will need to make surplus income payments.

Navigating through the Situation

If you find yourself in the How does my partner’s bankruptcy affect me? situation, consider taking the following steps:

1. Consult a Licensed Insolvency Trustee

Seek professional advice from a Licensed Insolvency Trustee. They can guide you through the implications of your partner’s bankruptcy and help you understand the next steps.

2. List your Joint Debts

Keeping track of your joint debts is crucial during bankruptcy. Make a comprehensive list of all the debts you share with your partner.

3. Decide the Fate of your Home

If your home is jointly owned, decide whether you are willing and able to buy out your partner’s share of the equity, or if selling the house is the more feasible option.

4. Calculate Surplus Income Payments

If your income exceeds the bankruptcy guidelines, calculate the surplus income payments that you will need to make.


Understanding your partner’s bankruptcy implications can be overwhelming. However, by diligently following the outlined steps, you can navigate through this complex process. Remember, professional help is available to guide you through this challenging time.

The information provided in this article is intended for general knowledge and should not be used as a substitute for professional financial or legal advice. Always consult a professional to understand the specifics of your situation.

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