Matrimonial Property Change Coming?
Ottawa is considering changes to add special protection for matrimonial equalization awards to the federal Bankruptcy and Insolvency Act (the “Act“).
The need to amend the Act is to ensure that spouses who declare bankruptcy are not relieved of obligations under provincial marital property legislation. This need was spearheaded in Manitoba after the Supreme Court of Canada decision in Schreyer v. Schreyer.
In the Schreyer decision, a farm wife of a 19 year marriage was left empty handed when she was unable to collect an equalization payment after her husband went bankrupt, yet the husband kept the entire family farm (the family’s main asset which was registered in his name alone).
The result does not seem fair and now a change is being urged to prevent similar results happening to others in Ontario and the rest of Canada. Without a change to the Act, the same result would likely be unavoidable.
If these recommended changes are made in the future, it will be an important change for many Canadians and their future.