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Will My Consumer Proposal Affect My Spouse?

Our Financial Experts Provide Insight 

If you’re exploring different financial relief options and have come across consumer proposals, you might be wondering how that process would affect your spouse. Because marriage can involve things like combining assets and obtaining credit together, it can feel overwhelming to try to understand how a consumer proposal would work. The team at J. Bottom & Associates Ltd. Ltd. can help you through the entire consumer proposal process and let you know how it might affect your spouse.

No matter what your financial situation is currently, there are several personal and corporate debt relief solutions available to debtors in New Westminster, North Vancouver, and Port Coquitlam, BC. With more than 55 years of combined experience, our Licensed Insolvency Trustees provide knowledgeable, simple, and practical solutions to help you get back on your feet. Call today for a free consultation or more information about the consumer proposal process!

How Joint Debt & Joint Assets Affect Consumer Proposals

If you and your spouse obtain credit jointly, you’re both responsible for the repayment of the debt. If your spouse is a co-signer, co-borrower, or co-cardholder for a line of credit and you file a consumer proposal, your spouse would be responsible for repaying the full balance of the joint debt. In these situations, an alternative option is to consider filing a joint consumer proposal. If one party files a consumer proposal, the other person is still responsible for the entire debt. When you file a joint consumer proposal, your Licensed Insolvency Trustee will evaluate your assets, and the value of your interest in these assets will be factored into the consumer proposal.

For example, if you own a home with your spouse and there’s $30,000 of equity in the home, the amount you offer your creditors in your consumer proposal will include the value of your share of the equity in your home. It doesn’t mean you’ll have to sell your home. The consumer proposal payments will be an additional obligation for the household that the non-filing spouse should be taking into consideration.

How Does it Affect Borrowing Money?  

Many financial institutions base their lending decisions on total household income. The higher the household income, the more money you can borrow. If they consider your income when deciding, they will also consider your credit history. If your income is required to purchase a home, it’s not likely you’ll be approved until you have completed your consumer proposal and rebuilt your credit history. They can choose to approve the mortgage based on your spouse’s income alone. However, it may limit the loan amount for purchasing a home.

What Are Surplus Income Contributions?

When you file a consumer proposal, you are typically required to make fixed, affordable monthly payments based upon a calculation that depends on several factors. As a direct result, your spouse’s income can result in higher payments on your consumer proposal. The Surplus Income calculation can be complicated, so it’s wise to let a professional Licensed Insolvency Trustee guide you through the process. Your monthly payments will be calculated based on several factors, including:

  • Your income
  • The income of other household members
  • The number of people in the household
  • Other variables
Contact J. Bottom & Associates Ltd. Today for Debt Relief Solutions  

Whether you’re considering filing a consumer proposal or exploring debt consolidation loans, there are several financial relief options available in New Westminster, North Vancouver, and Port Coquitlam, BC. Our experienced trustees are here to help answer any questions you might have and guide you through the process of getting out of debt. Our proven strategies have helped many of our clients get out of debt and achieve financial independence quickly and effectively. Contact us today to get started with your free consultation!