Facebook  Twitter  Vimeo

Family Law NB Family Law NB Family Law NB - Online resources for the public

What's New

Bankruptcy and Divorce
August 12, 2011

In Schreyer v Schreyer a Manitoba couple filed for divorce. The ex-wife was to receive equalization payments, a system where the net worth of each spouse is calculated and the spouse who has more assets pays the other spouse.

However, the ex-husband declared bankruptcy which meant that the ex-wife’s equalization payments were deemed to be worth nothing. The husband was allowed to keep the family farm because this asset was safe from bankruptcy. This result was challenged and upheld at the Manitoba Court of Queen’s Bench.

This case made its way to the Supreme Court of Canada (SCC).  On July 14, 2011, the SCC made the unanimous decision that when a person declares bankruptcy, equalization payments are considered debts and are therefore cleared.

This is a loop-hole that the Court is suggesting Parliament close due to the fact that it places family law and bankruptcy law in contention rather than allowing them to be more compatible.

While this case took place in Manitoba the same thing could happen in New Brunswick if a spouse’s claim to property is made as a claim for money or if a spouse’s claim is of a lower priority than another creditor. In a bankruptcy case, it would be possible for a spouse to make a claim for property in the bankruptcy proceedings. However, this did not happen in the Schreyer case because the ex-wife was unaware of the bankruptcy.

The best way for individuals involved in the division of marital property to avoid this type of result is to consult a family law lawyer about the various options for protecting themselves. This might include, for example, receiving the equalization payment at the same time the agreement is signed or requiring that the asset be sold to produce the cash that is due to the spouse. As well, if the asset is the family home, neither spouse should sign the deed over to the other until payment is made. If the asset is not the family home then a security should be registered to protect future payment.

Make sure you take steps to protect yourself so that this does not happen to you.


Family Law Information Video
Family Law Information Line
Family Law Workshops
Ask an Expert Videos
FAQs about Family Law
Going to Court
Family Law Forms
Family Law Publications
Find a Lawyer / Get Help
Self-Help Guides
Parenting After Separation
Parent Information Program
Court Evaluations Support
quick links header

Doing Your Own Divorce

Applying For Parenting and Support Orders

Changing Child Support - Orders made in NB

Changing Child Support - Orders made
outside NB

Need Help? Call the Family Law Information Line

Your Opinion Matters


What’s New
About This Site
Ask An Expert Videos

Living Common-Law
Separation and Divorce
Marital Property
Custody and Access
Child Support
Spousal Support
Support Enforcement
Staying Out Of Court
Representing Yourself
Other Issues


Going To Court
English or French?
Presenting Your Case in Court
Preparing for Your Court Hearing
The Day Of Your Hearing
Tips for the Court Hearing
After the Hearing

Family Law Forms
Printing & Completing Forms
Custody, Access and Support
Changing an Order
Interjurisdictional Support Orders
Consent Order
Court-Ordered Evaluations Support Program
Family Law Forms for Saint John and Moncton


Family Law Publications
Family Law for Immigrants
Child and Spousal Support
Child Support Recalculation Service
Parenting After Separation
Divorce and Separation
Support Enforcement
Family Violence
Other Materials

Find a Lawyer/Get Help
Family Law Information Video
You and Your Lawyer
Find a Lawyer
Get Help (Domestic Legal Aid)
Legal Advice Clinics

Self-Help Guides


Parenting After Separation
Online Parent Information Program (PIP)
(formerly known as For the Sake of the Children)

Family Law Information Line


Public Legal Education and Information
Service of New Brunswick

  P.O. Box 6000, Fredericton
New Brunswick, Canada E3B 5H1
  Telephone: (506) 453-5369
Family Law Line: 1-888-236-2444