A party can only be held responsible for repayment of a debt if they have signed a contract, loan agreement or credit card application. If your spouse or partner never signed a contract or requested a credit card, they cannot be held responsible for the debt. In Canada, marriage alone does not make you responsible for your spouse's debts.
With respect to credit cards, there are two ways in which the second party can be held responsible for repayment of the debt. One is where the individual actually requests a secondary card and signs an agreement saying they accept full responsibility for current and future debt. The other is where the credit card company sends a card out in the second individual's name with the primary cardholder's number and the second individual actually signs and uses the card. Use of the card may hold the secondary person responsible for not only their own, but all purchases made on the account by all cardholders.
Should you wish to remove your spouse or partner from your credit card or loan document, you must get confirmation in writing from the financial institution. If you do not obtain written confirmation, there is no guarantee the institution has removed the second party from their records.
Also, responsibility for debt between spouses as listed in a separation or divorce agreement does not legally bind a financial institution or creditor. Unless you obtain concurrence to the division and re-assigning of responsibility of debt from the creditor, they have the right to pursue anyone who signed on the debt.
Bankruptcy does not relieve the bankrupt of any support obligations.
To avoid paying this debt, you just have to relinquish your inheritance. The deceased's estate will then be placed under curatorship or it will go bankrupt. On the other hand, if you take the inheritance you will be responsible for the debt. You must first determine how much the assets are worth and whether they are worth more than the debts. If they are, some assets will be liquidated to pay the debts.
If you are an executor in an insolvent estate you might want to consider assigning it into bankruptcy. We have had plenty of experience with these situations.
These answers to frequently asked questions are provided as general information only. Each individual's situation is unique. To speak to someone now call us at 310-8888 for a free, no obligation, confidential consultation.
Our Licensed Insolvency Trustees (formerly called Trustee in Bankruptcy or Bankruptcy Trustee) and Estate Managers believe everyone deserves a financial fresh start, while being treated with dignity and respect. We have offices conveniently located in Calgary, Edmonton, throughout Alberta, and across Canada.
To speak to someone now call us at 310-8888 for a free, no obligation, confidential consultation.
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