Your ex-spouse declares bankruptcy and you're afraid of the consequences?
What happens to his obligation to pay you alimony?
You've decided to declare personal bankruptcy and are wondering whether you should continue paying alimony?
N. Séguin, licensed insolvency trustee, is available to provide you with information on all debts, both dischargeable and non-dischargeable.
Find out all the important information on alimony and bankruptcy in our article.
Our financial advisors will be happy to answer any questions you may have.
First of all, what is alimony?
In Quebec, alimony is an amount paid by a person to his or her former spouse or children to provide for their basic needs.
It is provided for by law in the event of separation, divorce or shared custody.
Spousal support is designed to maintain the recipient's previous standard of living, while child support is intended to ensure their well-being.
The amount of alimony is determined according to the income and expenses of each party, as well as the actual needs of the beneficiaries.
Is alimony mandatory in Quebec?
Yes, alimony is mandatory in Quebec under certain circumstances.
Under Quebec law, in the event of separation or divorce, spouses may be required to pay each other mutual support to meet their respective needs.
Similarly, in the case of shared or sole custody, child support is also mandatory to ensure their well-being.
Alimony amounts are determined on the basis of the income, expenses and real needs of the parties concerned, with the aim of ensuring a fair and reasonable financial contribution.
Personal bankruptcy in Quebec
Personal bankruptcy permet de se défendre contre les creditors. Ce moyen permet de se départir de ses dettes et de faire cesser le harcèlement de la part des créanciers. La faillite permet ainsi d’effacer ses dettes et de mettre fin à sa situation d’endettement. Mais, la condition est d’être considéré comme insolvable.
However, care must be taken.
Some debts are not considered dischargeable, such as alimony debts or obligations.
Bankruptcy and Insolvency Act specifies that the terms of a support agreement must be respected. And they must be respected before, during and after personal bankruptcy.
I have declared personal bankruptcy
Alimony is not considered dischargeable.
Alimony is not considered dischargeable in Quebec, as it is intended to ensure the well-being of a dependent beneficiary.
Even in the event of personal bankruptcy, this financial obligation cannot be cancelled, because it is considered essential to provide for the beneficiary's basic needs, such as food, housing and medical care.
You are therefore obliged to make monthly payments throughout the bankruptcy process, and even afterwards.
Under no circumstances will alimony be deferred or suspended.
By declaring bankruptcy, all your unsecured debts will be eliminated.
This will make child support payments easier.
I am the beneficiary of alimony
If your ex-partner declares bankruptcy, you will be considered a priority creditor.
Be aware that you can't get rid of this type of debt by declaring personal bankruptcy, regardless of your financial situation.
If your ex-spouse also owes you arrears of alimony, you can claim them as part of his or her personal bankruptcy.
Contact a family lawyer or a licensed insolvency trustee to find out about your rights.
The N. Séguin team will be delighted to answer any questions you may have.
How do I request a review of my alimony payments?
To request a review of support payments in Quebec, there are certain steps to follow.
First, gather relevant documents, such as proof of income and current expenses.
Then contact a family lawyer or family mediator for legal advice and to discuss your options.
If an amicable agreement is not possible, you can file a request for review with the competent court.
The court will then assess the significant changes in your financial and family situation to determine whether the amount of support should be modified.
What is a creditor?
A creditor is a person, company or institution that holds a claim on another person or entity.
It may be a debt resulting from a loan, an unpaid invoice, a contract or a commercial transaction.
The creditor has the right to demand payment of the debt according to the agreed terms.
In the event of non-payment, the creditor may take legal action to recover the sum due, such as legal proceedings or collection measures.
Is an alimony recipient considered a creditor?
In Quebec, an alimony recipient is considered a creditor.
When a person receives alimony or child support, they have a legal right to it by virtue of their status as beneficiary.
The parent who pays the pension is the debtor, and the beneficiary who receives it is the creditor.
In the event of non-payment or difficulties, the beneficiary has the right to take legal action to enforce the maintenance obligation.
Two types of creditors
The unsecured creditor
An unsecured creditor is a legal term for a creditor who holds a claim that is not secured by a pledge or mortgage on the debtor's assets.
Unlike creditors benefiting from a specific guarantee on assets, unsecured creditors depend entirely on the debtor's ability to repay the debt.
In the event of bankruptcy or liquidation, the unsecured creditor is generally considered to be at the bottom of the ladder in terms of priority for recovering his or her funds, which implies an increased risk in the event of the debtor's default.
Visit preferred creditor
A preferred creditor is a creditor who has a preferential or priority right to repayment of a debt by a debtor in the event of bankruptcy, liquidation or sale of assets.
This privilege is granted by virtue of a specific guarantee on the debtor's assets, such as a mortgage, pledge or security interest.
Preferred creditors are therefore in a more favorable position than unsecured creditors, as they have a greater chance of recovering their claims first.
This distinction provides creditors with a degree of security in the event of default by the debtor.
N.Séguin, your licensed insolvency trustee
Whether you need help calculating alimony or understanding the steps involved in personal bankruptcy, we're here to provide clear answers and advice tailored to your situation.
Don't hesitate to make an appointment for a free and confidential meeting to know all the special rules to your situation. We'll be delighted to welcome you and answer any questions you may have.
