I have a small business, a sole proprietorship. I have had many business reverses and must now file for bankruptcy. My debts involve 2 lines of credit with the bank and the Post office.

I am also in the midst of getting married! I am told since my fiance did not co-sign on these loans, he cannot be held liable for them? So it is safe for us to go ahead and get married?

Also, I understand that his income will be taken into account once I file. How much income are we allowed before we have to give the rest to the trustee?

I am just wondering if it is worthwhile for me to continue with my failing business, if all proceeds have to be given to the Trustee, because my fiance's income puts us over the line? There doesn't seem to be much point then.

If I close my business, will they not allow my "tools of the trade" and take my office equipment and inventory, etc? I would like to be able to do something else in the future to continue to draw an income.

Will we be allowed to use his income for our wedding expenses, or will they consider this an unallowable expense? (Total wedding costs will only be about $4,000 - paid over time - our wedding is planned for May/05)

Sorry so many questions! But one more. Six months ago, I had to accept I could no longer pay my mortgage. Our mortgage broker suggested giving the house to my fiance as a transfer of "Love and Affection". Now only his name is on the title.

My fiance then renegotiated the mortgage using his credit rating, for a much bettter rate. Is this going to look like I am hiding assets once I file? I was simply trying not to lose my house ...

Your many questions might be best answered in a confidential assessment of your situation, but I'll try to hit the highlights: Your fiance does not have to have any involvement with the process if he has not had anything to do with the business or signed on any of the debts. There is no reason why you cannot get married. The income allowed will depend on a number of factors too numerous to describe here, but include whether or not your fiance chooses to disclose his income. In Alberta you are allowed an exemption up to $10,000 value for property used to earn income, which would include your sole proprietorship assets. You will need to disclose to the Trustee all details about the house transfer, particularly the equity at the time of transfer, to determine whether it is a problem or not in a bankruptcy. I'd suggest you come in to talk to us about the situation before making any decisions.

Ann Clarke
phone: (403) 296-2972
aclarke@moneyhelp.ca