Bankruptcy Question & Answer Forum - Canada

Author:		Fed Up
Date:		July 31, 2005
Question:		My father is in poor health, and is a compulsive gambler. He owes taxes, as well as credit card debt, and it now appears that he's been taking unsecured loans through HFC. I consulted a lawyer in December who transfered the house into my mother's name, as we suspected he might try to take out a home equity line of credit as well. When he dies, what happens to his debt--is it assigned to my mom, or do they take what they can from his estate and write the rest off? Should he declare bankruptcy? Is the house in danger, even though his name is not on the title?
From:		Bruce, Alger & Associates Inc.
Date:		August 2, 2005
Answer:		If your mother is on any of the credit cards as a supplementary cardholder or co-applicant, she will be liable for the debts too. However, if your father is the only one on a card, the debt is his alone. If your father transferred his half of the house to your mother at a time when he was insolvent, the creditors or your father's trustee, if he goes bankrupt, have the right to go after the transferred house equity. Should he declare bankruptcy? He will need to see a trustee and get his entire situation reviewed before this question can be properly answered. Bruce Alger phone: (403) 296-2970 balger@alger.ca