Bankruptcy and Common-Law Partner

Category: Bankruptcy Q&A

Note: the question in this article contains old surplus income limits. Click here to review the updated limits.

Question: I understand that filing bankruptcy will not affect my common-law partner because no debts are in her name, however, will my payments for bankruptcy be increased because I am living with her?

Answer: You are correct that if you file bankruptcy for your debts your common-law spouse’s credit report is not affected by your filing, if no debts are in their name.

The amount you pay in a bankruptcy is based on your family income.  The more your family earns, the more you may be required to pay.  It’s called surplus income.

There is a set threshold for a single person of about $2,000 per month (this number increases slightly each year).  For a family of two, the threshold is about $500 per month higher.  If you have children living with you, the number is even higher.

If you and your spouse together earn less than the limit ($2,500 or higher if you have children), you are under the limit, so there are no extra payments required.