Question: My husband and I are currently in a Consumer Proposal and have not missed a payment. I am able to pay the proposal on my own without anything from him. The problem we have now is he has had to shut down his company and may have to claim personal bankruptcy. I am not on any debts he has with his company. Will I be allowed to take his name off the proposal and continue the proposal on my own?
Also, I am worried about my sons’ RESPs, will we lose them if I do have to claim bankruptcy with him?
Answer: You have a number of options:
First, you could continue to make the proposal payments on your own. As long as all payments are made on time, the proposal will be completed, and your debts will be discharged, so you will not need to go bankrupt. If your spouse, who is joint on the proposal with you declares bankruptcy, he will deal with his debts in his bankruptcy.
Second, you could apply to court to have the proposal “split”, so that only your name is on the proposal. That is a very unusual procedure, and there is no guarantee the court would allow you to do that.
Third, you could request the permission of the court to allow you to file another proposal, with just your name on it. Court permission is required because you are not allowed to file a second proposal if your first proposal is not completed. There is also no guarantee the court would permit you to file a second proposal, and even if they did there is no guarantee your creditors would accept it.
As for your son’s RESP, yes, if your name is on the RESP and you declare bankruptcy, you lose the RESP.
Since there are many possible options, we suggest you request a meeting with your current consumer proposal administrator and ask them to fully review all options with you and your husband.