Do Common-Law Partners Share Debts in Ontario?

If you live with a partner who has loans, credit card balances or other debts, it is natural to worry that those debts could become yours. The worry is stronger when money is mixed together through shared accounts, a shared home or a shared lifestyle.

The short answer is that common-law status alone is not what makes you responsible for a debt. What matters far more is what you signed, whose name is on the account, and how your money is held. This article walks through the common situations in Ontario.

Start with whose name is on the debt

In general, a person is responsible for a debt because they agreed to it, usually by signing a credit contract or opening an account. Living with someone, sharing groceries or splitting rent does not, on its own, turn their separate loan into your loan.

There are two common ways you can end up responsible for a partner's debt. You may have signed as a co-borrower, meaning you applied for the credit together. Or you may have signed a guarantee, which is a written promise to pay if the main borrower does not. If you are unsure which applies to you, read the agreement or ask the lender.

Joint credit cards and bank accounts

Joint accounts are where partners most often get caught. Co-borrowers on a joint credit card can use the account and are equally responsible for the balance. That means a lender can look to you for what is owing, even if your partner ran up the charges.

An additional cardholder is different. Someone who is only an additional cardholder is not responsible for repaying money owing on the credit card account. If your partner added you to their card, check which type of holder you are.

Joint bank accounts work in a similar way. Joint account holders share responsibility for all transactions, and an overdraft may create a debt for everyone on the account. It is also worth asking your bank how it treats a joint account if one holder owes the bank money, since banks may have rights to take funds from an account to cover a debt.

How this differs from property and support

Ontario does not divide property between common-law couples when they separate. Each partner keeps the property they bought. That rule is about property, not debts, so do not assume it works as a shield or a sharing rule for loans. Debts still depend on the contracts behind them.

Support is a separate question. For support purposes, the Family Law Act treats two unmarried people who have cohabited continuously for at least three years as spouses. It also treats unmarried partners as spouses for support, however long they lived together, if they cohabited in a relationship of some permanence and are the parents of a child as set out in s. 4 of the Children's Law Reform Act. Every such spouse must support themselves and the other spouse according to need, to the extent they are able. A support obligation is not the same as being liable for your partner's credit card, but it can affect your finances after separation.

A shared home and shared ownership

If you and your partner own a home together, how you hold title matters. Joint tenancy is co-ownership with a right of survivorship, while under a tenancy in common each owner holds an undivided interest that does not end on their death.

Mortgages add a wrinkle. In the land titles system, a charge registered by fewer than all the joint tenants does not automatically sever the joint tenancy, and whether the owners intended to sever is a factual question for the courts. If one of you has borrowed against a jointly owned home, get advice on where that leaves you before assuming anything.

What to do next

• List every account, card, loan and mortgage, and note whose name is on each one.
• Check whether you are a co-borrower, a guarantor, or only an additional cardholder.
• Request statements for joint accounts so you can see balances and overdrafts.
• Ask your lender or bank how your accounts are treated if your partner owes money.
• Think about a written cohabitation agreement, which unmarried partners can make about their rights and obligations, including property and support.
• Remember that such an agreement is unenforceable unless it is in writing, signed and witnessed.

If a creditor has contacted you about a partner's debt, or you are thinking of co-signing, speak with a lawyer before you sign or pay. Your answer will depend on the exact documents.

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