Does your spouse’s credit score get affected when you file bankruptcy?
Bankruptcy is a personal filing. If the debt is in your name, the bankruptcy is in your name, and your spouse’s finances are not touched.
Your spouse’s credit score isn’t affected, and their assets are protected. The bankruptcy does not appear on their credit report.
Some mortgage lenders and credit card issuers ask about household bankruptcy when your spouse applies for credit, but your filing does not create a legal barrier for them. The confusion comes from joint debts, which work differently and are covered in the next section.
What happens to joint debts when one spouse files bankruptcy?
When you file for bankruptcy, you get a stay of proceedings that stops creditors from collecting against you. Your spouse does not get that protection. If the debt is in both your names, the creditor can turn to your spouse for the entire balance.
Co-signing works the same way. If your spouse co-signed on a loan, credit card, or line of credit included in your bankruptcy, that guarantee survives your filing. The creditor can go after your spouse for the full amount, not just half.
This is why joint debts are the biggest risk when one spouse files. Before you file, get a full picture of which debts are joint and which are yours alone.
A Licensed Insolvency Trustee can review your credit report and help you sort this out.
How is a jointly owned home treated in bankruptcy?
If you own a home with your spouse and file bankruptcy, the trustee becomes the legal owner of your share of the property under the Bankruptcy and Insolvency Act. Your spouse’s share is not affected.
The amount of equity that is protected depends on your province. As of 2025, Ontario exempts $10,783 under the Execution Act.
In British Columbia, the Court Order Enforcement Act exempts $12,000 in equity for homes in Metro Vancouver and the Capital Regional District, and $9,000 elsewhere in the province. Alberta’s Civil Enforcement Act exempts $40,000.
Source: Moses Advisory Group – Bankruptcy Exemptions by Province in Canada
What happens if your equity exceeds the exemption?
If your share of the equity exceeds the provincial exemption, you have two options. You can pay the excess amount to the trustee and keep the home, or your spouse can buy your share from the trustee at market value. If neither happens, the trustee can force a sale.
| Province | Home equity exemption (2025) | Legislation |
|---|---|---|
| Ontario | $10,783 | Execution Act, R.S.O. 1990, c. E.24 |
| British Columbia (Metro Vancouver and Capital Regional District) | $12,000 | Court Order Enforcement Act, R.S.B.C. 1996, c. 78 |
| British Columbia (elsewhere) | $9,000 | Court Order Enforcement Act, R.S.B.C. 1996, c. 78 |
| Alberta | $40,000 | Civil Enforcement Act, R.S.A. 2000, c. C-15 |
Does household income affect surplus income calculations?
Yes. Your spouse’s income directly affects your bankruptcy payments and how long your bankruptcy lasts, even though your spouse is not filing.
Surplus income is the amount your household earns above a threshold set each year by the Office of the Superintendent of Bankruptcy. The threshold is based on family size.
As of 2025, the threshold for a single person is $2,666 per month. For a household of two, the threshold is $3,318 per month.
Source: Office of the Superintendent of Bankruptcy Canada – Directive No. 11R2-2025, Surplus Income
If your household’s net income exceeds the threshold by more than $200 per month, you pay 50% of the excess to the trustee. Your share is proportional to your percentage of the household income.
Stop and think about that for a second. Your spouse’s raise, overtime, or new job can increase your bankruptcy payments.
How long does bankruptcy last?
For a first-time bankruptcy with no surplus income, the term is nine months. If you have surplus income above the $200 threshold, the term extends to 21 months.
A second bankruptcy lasts 24 months without surplus income, or 36 months with surplus income.
| Bankruptcy | Without surplus income | With surplus income |
|---|---|---|
| First time | 9 months | 21 months |
| Second time | 24 months | 36 months |
How long does bankruptcy affect your credit rating?
The bankruptcy term is not the full story. The credit damage lasts years longer.
A first-time bankruptcy stays on your Equifax credit report for six years after your discharge date. TransUnion keeps the record for six or seven years, depending on your province. If you file bankruptcy a second time, both credit bureaus keep the record for 14 years.
Source: Financial Consumer Agency of Canada – How Long Information Stays on Your Credit Report
During that time, getting approved for a mortgage, car loan, credit card, or even a phone contract is difficult. Some lenders will not consider you at all.
Others charge higher interest rates or require a co-signer. Your spouse is not affected by this unless they co-signed on debts included in your bankruptcy.
What happens with supplementary credit cards?
A supplementary credit card shares the same account number as the primary cardholder’s card. The primary cardholder is liable for all charges on the account, regardless of who made them.
Liability for the supplementary cardholder depends on the card issuer’s agreement. Some issuers hold supplementary cardholders liable only for their own charges. Others create no liability for the supplementary cardholder.
Read your specific card agreement or contact the issuer directly. If you file bankruptcy and hold a supplementary card on your spouse’s account, your bankruptcy does not affect your spouse’s account. If your spouse files and you are a supplementary cardholder, the terms of the agreement determine whether you owe anything.
Can spouses file bankruptcy together?
Spouses can file bankruptcy separately or together through the same Licensed Insolvency Trustee. Filing together does not combine your bankruptcies into one. Each spouse still files individually, but coordinating through the same trustee simplifies the process when you have joint debts.
If you both file, both of your shares of any joint debt are discharged. If only one of you files, the other remains liable for the full amount of any joint debt.
That is the most important distinction. Filing together eliminates the risk of creditors chasing the non-filing spouse for joint debts.
What about transferring assets to your spouse before filing?
Transferring assets to your spouse before filing bankruptcy is a transfer at undervalue under Section 96 of the Bankruptcy and Insolvency Act. The trustee reviews asset transfers made within five years before filing for transfers between non-arm’s-length parties, and your spouse is a non-arm’s-length party.
Source: Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 96
Transfers during that period can be reversed, and the trustee can seize the asset. Do not move money or property to your spouse to avoid bankruptcy consequences.
The trustee will find out, and the transfer will be reversed.
Talk to a Licensed Insolvency Trustee
If you are considering bankruptcy and worried about how it affects your spouse, book a free consultation with a Licensed Insolvency Trustee. A trustee can review your debts, your household income, and your options.
If bankruptcy is not the right choice, a trustee can explain alternatives. The initial consultation is free and confidential.
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Frequently asked questions
Does my spouse’s income affect my bankruptcy payments?
Yes. The surplus income calculation is based on total household income, not just yours. If your household income exceeds the OSB threshold for your family size by more than $200 per month, you pay 50% of the excess.
Your payment is adjusted to reflect your share of the household income. If your spouse earns more, your threshold is higher, but so is the total income used to calculate whether you have surplus income.
Will my bankruptcy stop my spouse from getting credit?
Not directly. If your debts are separate, your bankruptcy does not appear on your spouse’s credit report and does not affect their credit score. Some lenders ask about household bankruptcy when your spouse applies for credit, but your filing does not create a legal barrier for them.
What happens to joint debts if we both file bankruptcy?
If you both file bankruptcy, both shares of the joint debt are discharged, and the debt is eliminated. If only one of you files, the other remains liable for the full amount.
Can the trustee take my spouse’s car if I file bankruptcy?
If the car is in your spouse’s name and they are making the payments, the trustee has no claim on it. If the car is jointly owned and you file bankruptcy, the trustee considers your share of the vehicle’s equity. If your share exceeds the provincial exemption threshold, the trustee requires a buyout or can seize the vehicle.
What if my spouse co-signed on a debt I am including in bankruptcy?
Your bankruptcy discharges your obligation to pay the debt, but it does not release your spouse from the co-signing agreement. The creditor can pursue your spouse for the full balance.
If this is a concern, talk to a Licensed Insolvency Trustee about whether a consumer proposal (which keeps your assets intact and can include a payment toward joint debts) is a better option than bankruptcy.
Does my spouse’s bankruptcy affect my business?
Only if you co-signed on business debts or personally guaranteed business loans. If your spouse’s business debts are separate from yours, their bankruptcy does not affect your business. If you are both directors of the same company, the situation is more complicated, and you should talk to a trustee.
How does bankruptcy affect joint bank accounts?
The trustee can access funds in a joint bank account if the account holds money that belongs to the filing spouse. Proving which funds belong to which spouse is difficult. Opening a separate account before filing helps keep your spouse’s money distinct.
What happens to joint tax refunds during bankruptcy?
If you filed a joint tax return and a refund is owed, the trustee claims the portion attributable to the filing spouse. The non-filing spouse’s portion of the refund is not affected. The CRA splits the refund based on each spouse’s individual tax situation.
Do I have to tell my spouse I am filing bankruptcy?
There is no legal requirement to tell your spouse you are filing for bankruptcy. However, the trustee needs household income information to calculate surplus income, so your spouse’s income details are required. Keeping it secret is difficult in practice.
Can I protect assets by putting them in my spouse’s name before filing?
No. Transferring assets before bankruptcy is a transfer at undervalue under the Bankruptcy and Insolvency Act. Trustees review transfers between spouses made within five years of filing and can reverse them.
The asset is seized, and the transfer is treated as an attempt to defeat creditors.