Question: |
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My wife and I are in dept individually and as we are married (30 + Years) I gues the debts would be considered shared (personal debt.) We should probably file for bankruptcy due to the size of the dept $200,000 My wife and I are also disabled and our only income is disability income. I have reason to believe that within the next (2) months, I will be receiving about $4,000 monthly, increasing. At that time we would of course come off disability. My (2) questions are as follows: I am also the owner and CEO of a non-operational Fully Incorporated Company and my wife is a Director and Shareholder. The purpose of the Corporation is for circumstances like this, it waas created for financial transactions. If this actually happens and my wife and I have "NOT" declared personal bankruptcy what would happen if that $4,000 month went into the Corporation. Would that $4,000 be protected from creditors? The Corporation has no depts or, assets and is not involved with our personal debts in any manner. What would happen with that $4,000 month going into the Corporation if my wife and I "DID" declare bankruptcy? Thank you for your kind assistance.
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Answer: |
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If you file a bankruptcy, you are required to step down as a director of an incorporated business. You cannot flow income through the corporation due to this fact and even if you did, your shares would be valued and your creditors would be entitled to all the funds as it would not longer constitute income. You and your wife's debts are not joint debt unless you both personally guaranteed or signed for the debt. Debt is very much an individual thing however assets are treated a little differently in that an individual may own a particular asset but the matrimonial property act dictates true ownership and most often that is 50% each.
Karen Rideout
phone: (780) 296-2973
If you wish to talk to one of the Edmonton bankruptcy professionals at Alger & Associates Inc., you can call us TOLL FREE from anywhere in Alberta at 310-8888. After hour appointments at our Edmonton bankruptcy offices are available.
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