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SA Bankruptcy - Will it Affect My De Facto Partner?

Discussion in 'Debt and Bankruptcy Law Forum' started by Brooklyn, 18 December 2014.

  1. Brooklyn

    Brooklyn Member

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    Hi,

    After a series of unfortunate events I am considering filing for bankruptcy.

    I have looked at the forms & one of the questions is - Do you have a spouse & what is their income?
    I am in what is classified as a " De Facto" relationship which I understand comes under the term "spouse" for the purpose of these forms.

    My question is - if I declare our relationship & his income, will that also send him bankrupt or will he be in any way liable for my debts?

    He has debts of his own & our finances are not intertwined, with the exception of rent/electricity. Also, neither of us earns over the income threshold limit.

    Any advice would be much appreciated

    Regards.
     
  2. Amanda E

    Amanda E Well-Known Member

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  3. Sophea

    Sophea Well-Known Member

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    Hi Brooklyn,

    Yes a de facto partner is considered a spouse for the purposes of the Bankruptcy Act. What constitutes a de facto relationship is defined by the Family Law Act as a couple of the same or opposite sex who are in a relationship as a couple, living together on a genuine domestic basis.

    Your partner will only be affected by your bankruptcy if he is a guarantor of your debts, or if he has joint debts with you or or jointly owns property with you which will vest in the trustee. Even if you benefit from the assets of your spouse who does not file for bankruptcy - i.e. if you live in his house those assets cannot be touched because they don't belong to you, the bankrupt.

    Hope that helps.
     
  4. Brooklyn

    Brooklyn Member

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    Thank you for your replies.

    To update after speaking with AFSA, it is only when your "spouse" has joint interest in property, assets or debt that the Bankruptcy may impact them. It is listed on the forms so they can ascertain whether your spouse may be classified as a "dependent" and in that case, the income threshold limit - the amount you can earn before your trustee will require you to make contributions to the bankrupt estate - increases.
     
  5. Sarah J

    Sarah J Well-Known Member

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    Hi Brooklyn,

    Yes, the AFSA is correct. Further, it will impact them if the asset is jointly owned. In other cases, your partner should not be affected by your bankruptcy filing.
     

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