Case Study – Recently Separated

Divorce is horrendous, there’s no doubt about it. Add in debt, and a bad situation gets even worse. Relationship breakdown is one of the common reasons people file a consumer proposal or bankruptcy. Not only do the assets get divided up, so do the liabilities. This brings many challenges as emotions run high. This case study will be zeroing in on such a situation.


The couple, in this case, had a particularly messy divorce. They were locked into a custody battle for their children and every day brought new challenges. One of the bigger challenges was deciding what to do with their joint home. Both of them wanted to keep it, but neither could get approved for the mortgage individually. They decided to sell the property and split the profits – $15,000 each.


Debt can be a symptom of any number of problems and life circumstances. However, it is important to understand that YOU ARE NOT YOUR DEBT.

At 4 Pillars Halifax, we'd love to discuss how we can help you become debt free.

They were still in the process of disentangling their lives when one began to receive collection calls for the other’s bank loan. Although she had co-signed the loan, she had no idea why they would be reaching out to her for payment. This was when she learned that her ex-husband had filed for bankruptcy. This meant that all of the joint debt that they had accumulated during their marriage now defaulted to her. It was not just 50% of the debt – it was 100%. Already distraught by the end of her marriage, this was a devastating blow. She now had $60,000 of debt to deal with on top of everything else. She was able to use the proceeds from the house to pay some of it, but it still left her with $45,000. Feeling like she had nowhere to turn, she researched 4 Pillars and gave us a call.

Case Study - Recently Separated 1

The Plan

After her initial consultation, the first step for this client was to open a new bank account that was completely separate from her ex. Any accounts they held jointly could be accessed by him. We assured her that although him filing for bankruptcy had left her with all of the debt, she still had options. She hoped to be able to purchase a home within her budget at some point, so bankruptcy made her nervous.

A bankruptcy would damage her credit for 6 years past the date of discharge – for her this would mean over 8 years of having very limited access to credit. Instead, her debt relief specialist outlined what a consumer proposal might look like for her situation. We assisted in structuring a proposal that is filed with a Licensed Insolvency Trustee and would reduce her debt by 70%. As long as it was accepted by her creditors, it would have her paying back $13,500 instead of $45,000. Over the 60-month proposal, she would be paying $225/month.


As with nearly every proposal 4 Pillars assists in structuring, it was accepted by her creditors. Such a massive drop in how much debt was hanging over her head was like seeing the light at the end of a dark tunnel. 4 Pillars continued to support her after her proposal had passed to give advice and answer any questions she might have without judgement. Unlike in bankruptcy, she was able to start rebuilding her credit while still paying off her proposal. 4 Pillars offers access to unique programs that can get people back on track sooner. Taking advantage of these programs as well as our aftercare portal, she was able to restore her finances and her life.


Divorce is ugly. Divorce when debt is involved? Even uglier. However, sometimes a crisis can become an opportunity. This can mean a fresh start for you and your finances. If a relationship breakdown has left you with significant debts, we may be able to help.

Our process first starts with a free consultation to understand your options. To schedule one, please fill out the form below and someone will be in touch as soon as possible.

  • This field is for validation purposes and should be left unchanged.

Debt Relief SpecialistThis article was written by David Moffatt. A Senior Debt Relief Specialist with 4 Pillars Halifax. 4 Pillars has assisted in creating plans that have helped save Canadians over $1 Billion dollars of consumer and tax debt since 2002. We believe that no consumer should have to struggle with the stress of overwhelming debt. Our debt restructuring plans can help you cut your debt by up to 80% with less than 3% of our clients ever getting into deep financial difficulties again. If you are struggling with debt please reach out. It hurts to continue to suffer financially.

4 Pillars Debt Consolidation Halifax services, Dartmouth, Bedford, Sackville and the entirety of HRM.