If I was to go bankrupt would this affect my husband? This is debt before we were married. We own our house as joint tenancy -- would the house have to sell? We owe $153,000.00 and it's worth approximately $300,000. Also, when going into bankrupty does your furniture and beds things like that have to be sold? What do you keep and what don't you?

Thank you,

If you file for bankruptcy your husband should not be directly affected.

In Alberta you are allowed a total equity exemption of $40,000 for a personal residence: if your home is worth $300,000 and the mortgages total $153,000, there is about $147,000 equity. After allowing for the exemption you have about $107,000 equity, of which approximately half ($53,500) is yours. That amount would need to be paid to the Trustee in a bankruptcy. To obtain those funds you may need to sell or further mortgage the house, which would affect your husband. You may be able to do a proposal if you have significant equity in your house. I would suggest you talk to a Trustee about your debts and assets.

Regarding your question on what you can keep, if you look under the Will I lose everything? section under "What is Bankruptcy" on our website, this should give you the information you need.

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