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Stuck with ex-husband’s business debt
Question: I have been divorced for 5 years now and my ex-husband declared bankruptcy in June. He has a business and let the credit line go to $30,000.00. Since he declared bankruptcy they are now coming after me since I had signed a personal guarantee, he also did. I was taken off the business and bank account but not the personal guarantee. Is there anything that I can do other than declare bankruptcy? My divorce lawyer has done nothing other than suggest bankruptcy and another lawyer suggested we sue him.
Answer: Since your ex-husband is bankrupt, there is no point in suing him; any amounts he owes to the banks would be included in his bankruptcy. You have three options:
First, you could attempt to work out a settlement with the bank. If you tell them you are considering bankruptcy and they will get nothing, they may be willing to settle for less than the full amount owing.
Second, if you have income and assets and don’t want to go bankrupt, you could file a consumer proposal. A consumer proposal deals with all of your debts (not just the one you guaranteed for your ex husband), and if successful you end up with one monthly payment.
Third, if that’s not possible, then yes, bankruptcy is an option. You should arrange a no charge initial consultation with an Ontario bankruptcy trustee to determine which option is right for you.
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