If My Spouse Files Bankruptcy Does It Affect Me?

The Consequences When a Spouse Declares Bankruptcy: Understanding the Impact

When you vow “for better, for worse, for richer, for poorer,” you never anticipate the “worse” or “poorer” part to come into play. But what happens if your spouse files bankruptcy? Will it have any consequences on your financial status? This article will guide you through the journey of bankruptcy and its effects on spouses in Canada.

A Comprehensive Look at Bankruptcy

Before jumping into the impact on the spouse, let’s understand what bankruptcy is and how it works in Canada.

Defining Personal Bankruptcy

Personal bankruptcy is a legal process governed under the Bankruptcy and Insolvency Act in Canada. It’s a solution for individuals who are unable to pay their debts. When a person declares bankruptcy, they surrender their assets to a Licensed Insolvency Trustee, who then sells them to repay creditors.

The Bankruptcy Process

Bankruptcy isn’t an overnight process. It includes several steps:

  1. Filing for Bankruptcy: The first step is to meet with a Licensed Insolvency Trustee and file for bankruptcy.
  2. Trustee Role: The trustee takes charge of your assets and deals with your creditors.
  3. Bankruptcy Duration: The duration of bankruptcy varies based on individual circumstances and previous bankruptcies.
  4. Bankruptcy Discharge: At the end of the bankruptcy period, the individual receives a bankruptcy discharge, releasing them from the obligation to repay most of their debts.

The Effect on the Non-Bankrupt Spouse: Dispelling the Myths

Now let’s delve into the central question: if my spouse files bankruptcy, does it affect me? Contrary to popular belief, your spouse’s bankruptcy doesn’t directly influence your financial standing.

Debunking the Myth of Shared Responsibility

There’s a common misconception that being married means sharing responsibility for your spouse’s debts. This is not the case. Your spouse’s debts remain theirs, and bankruptcy discharges only their obligation to repay those debts.

Note: Collection agencies might threaten to pursue you for your spouse’s debts. This is a scare tactic. They can only seek repayment from the person who owes the debt.

Understanding Co-signed or Guaranteed Debts

The exception to the rule above is if you’ve co-signed or guaranteed your spouse’s debt. In these cases, you’re liable for the debt, not because you’re married, but because you’ve legally agreed to be responsible for it. If you both have a joint credit card account, for instance, the debt belongs to both of you.

Indirect Effects on Spouses

Although your spouse’s bankruptcy doesn’t directly impact you, there may be some indirect effects.

Future Financing and Credit Implications

When your spouse files for bankruptcy, it might affect you in the future if you apply for joint financing or credit. The bankrupt spouse might be ineligible for co-signing a loan or may be subjected to higher interest rates. This could influence your financial planning if you need to apply for joint credit.

Determining Joint or Supplementary Credit Cards

The distinction between joint and supplementary credit cards can be tricky. If you’re considering filing for bankruptcy and want to know how it will affect your spouse, it’s best to consult with a Licensed Insolvency Trustee.

Trustees Across Canada

When facing bankruptcy, it’s essential to have a knowledgeable and experienced trustee by your side. Trustees are available across Canada, from Alberta to Quebec.


Navigating the complex world of bankruptcy can be daunting, especially when considering the potential implications for your spouse. Remember, if your spouse files bankruptcy, it does not directly affect you, unless you’ve co-signed or guaranteed their debts. However, there may be indirect effects on future joint credit applications. Always consult with a Licensed Insolvency Trustee for personalized advice.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.