If my ex declares bankruptcy, am I liable for his debts?

Yes and no. If the two of you were cohabiting during the time the debts arose, you may have unwittingly signed for the debts and the creditors will chase you. For example, if you are a second signatory on the credit card or signed as guarantor on a line of credit or mortgage, you will be held liable.

Many couples, while they are together, co-mingle their assets and sign on each other’s debts. Clearly, if one of the spouses cannot pay or fulfill the obligations, then the bank or financial institution or other creditor will chase both of them. A declaration in a Separation Agreement that the other spouse will pay certain debts is not sufficient, even if the debts are specified, because the Separation Agreement is personal between the spouses and does not affect third-party creditors.

Upon separation, you must cancel all joint credit cards, get your name off joint bank accounts that have overdraft provisions, and freeze the quantum of joint lines of credit to make sure that you are not further indebted after a separation. It’s not enough to make a phone call; a registered or couriered letter should follow to protect you.

One of the biggest possible creditors is Revenue Canada, and I have seen situations in which they chased a spouse on account of the other spouse’s tax arrears that arose during the cohabitation and while both of them were living in the home as against the jointly held home. It doesn’t mean that they will go after your interest in the home, but they can chase your spouse’s interest in the home particularly if the house is jointly owned.

Remember: cancel and/or freeze lines of credit, credit cards, and any other financial togetherness that you possibly can at the point of separation. You can be held responsible for your ex-spouse’s debts.

Judith Holzman is a collaboratively trained family lawyer who has practiced for more than 33 years in the Toronto and York Region area. She has participated in amendments to the Family Law Act (provincial) and the Divorce Act (federal) in the area of religious divorce.