Division Of Property And Debt after Divorces in canada - Zukerman Law

The Division Of Property And Debt In Divorces

British Columbia couples who have accumulated property and debt during their relationships equally share both when they separate or divorce. This applies to married and common-law couples who have lived together for a minimum of two years and maintained marriage-like relationships.

The Family Law Act provides for both people in marriage or common-law relationships to share any property that they acquired during the relationship. Any property that they owned prior to entering the relationship, however, is not shared. Divorcing spouses must apply for property division within two years of obtaining a divorce order, while common-law couples must apply within two years of separating. The couple does not have to split the property equally but must come to an agreement on any division of property if they do not take the matter to court.

As with property, couples equally share the debt that they accrue, including debt from mortgages, income tax, loans, repair costs and credit cards. If the matter of debt is taken before a judge, it may be divided equally unless doing so would be unfair. However, some couples are able to agree on debt division without going to court. In such cases, the division does not have to be split down the middle. Some couples do not open joint loan or credit card accounts during their relationships. Since creditors only seek payments from the persons whose names are on the accounts, they often hold only one spouse or person in the relationship liable regardless of the couple’s debt division agreement upon divorce or separation.

On the other hand, couples with joint accounts might both be contacted for payments regardless of their divorce or separation settlement. It could be helpful for some couples to only leave one of their names on the accounts that they agree to settle. Lawyers may be able to help clients negotiate property and debt division agreements, as well as guide them in ensuring that their finances are in order to avoid credit complications.