One question that continues to be asked is why does my partner, or spouse's income need to be reviewed in my bankruptcy?

When someone goes bankrupt they are concerned about their partner or spouse becoming a part of their bankruptcy; and even though the debts may be in just their name, the Receiver can very well want to know who pays what bills and their partner/spouse's income.

This does not mean the non-bankrupt partner or spouse is a party to the bankruptcy. The OR needs to get an accurate picture of the bankrupt's finances.

This previously written article may help to explain this as well:

Going Bankrupt And A Partner Or Spouse’s Income

Why does my spouse’s salary need to be taken into consideration in my bankruptcy?

Why does the OR need to know my partner’s wages?

Will my bankruptcy or IVA affect my partner or spouse’s credit?

A question I have been receiving more and more lately is from people considering bankruptcy, or have gone bankrupt, or considering an IVA and are concerned about their partner or spouse’s credit being affected. They also want to know why their partner or spouse’s income is looked at, especially in bankruptcy by the Official Receiver.

Here is an example of one such question:

Why does my husbands salary need to be taken into the figures of household income whilst the OR calculates expenditure. The reason I ask is its is my bankruptcy and just because he earns more than me doesn't mean he contributes to the house hold bills by more than I do. He has his own things that he pays for out of his salary and we have always split the house bills 50/50 but it looks like his salary will be considered which I don't understand as he did not know about all of my debt and should not suffer because of me please can you advise me on this.

And here is a typical quick response to this query:

The Official receiver needs to get an accurate and complete picture of your personal finances, and this can include looking at your partner or spouse's wages as well.

The OR will want to see the bills/expenses you both have and who pays what; this is to look at a couple of things.  One thing is to see if you have any surplus of income to pay into the bankruptcy, the second is to see how you are living or getting by, and lastly can be to see if you may be hiding anything.

Just by the OR doing this does not make your husband a part of your bankruptcy, nor would he be responsible to pay into your bankruptcy.

As you will note in my answer, as long as there is no joint debt or jointly held assets, the bankruptcy or IVA does not directly affect the partner or spouse and does not affect their credit. The only issue that may arise is in the address being used for the IVA or bankruptcy will be listed on the insolvency register and this MAY cause an issue if someone else at that residence/address, applies for credit. In that instance a notice of disassociation may need to be placed on the non-bankrupt or IVA person’s credit history.

So directly the non-bankrupt partner or spouse is not affected by the bankruptcy or IVA, however indirectly there can be cause for concern.

You just need to keep in mind that it is the Official Receiver’s job to get an accurate picture of your finances and how you are living, and if your partner or spouse is paying the majority of the bills, and you have an income/wages, the OR is going to want you to pay into the bankruptcy.

In the instance of an IVA, it is so the supervisor or IP setting up the IVA, can get the best return for the creditors being listed or placed in the IVA.

On occasion a client has mentioned to me that their partner or spouse has no idea of the level of debt they have, and they don’t want them to ever know.

That’s a difficult one, especially if you go bankrupt or set-up an IVA, as again, it can be requested regarding information on the partner or spouse’s income and who pays what bills.

This gets back to communication in the relationship and it may be best to address this first, then together you can work on and concentrate on the debt problem