- Unless an agreement or order says otherwise, spouses are equally responsible for family debt.
- Family debt is generally debt incurred from the start of the relationship to separation, and after separation only to maintain family property.
- Dividing a debt between spouses does not bind the lender, so a debt in one name stays owed by that spouse to the creditor.
Credit cards, car loans, lines of credit and tax debts can feel just as important as the house when you separate. Many people assume a debt in their spouse's name is not their problem, or that a debt in their own name is theirs alone.
The rules are more nuanced. This article explains how British Columbia treats family debt between spouses, what happens with lenders, and what to do to protect yourself.
This article covers the law of British Columbia.
What counts as family debt
Family debt is financial obligations incurred from the start of the relationship to separation. After separation, a debt counts only if it was incurred for the purpose of maintaining family property.
Unless an agreement or order says otherwise, spouses are equally responsible for family debt. A person is a spouse if married, or if they have lived in a marriage-like relationship for a continuous period of at least 2 years, and a spouse includes a former spouse.
Whose name is on the debt
Because spouses are equally responsible for family debt, a debt in one name can still be family debt and be shared. The name on the card or loan is not the deciding factor.
The reverse also matters. A debt that one spouse took on after separation for their own purposes is generally not family debt, unless it was incurred to maintain family property.
Lenders are not bound by your division
The property division rules do not affect the rights of a spouse's creditors, guarantors or assignees regarding family debt. A division between spouses therefore does not bind a lender, and a debt in one spouse's name remains owed to the creditor by that spouse.
To give effect to a division, the court can order indemnities, compensation or security. An indemnity is a protection that lets one spouse recover from the other what they paid beyond their share. How a particular lender treats a mortgage or loan when one spouse stays in the home varies, so it is worth asking the lender and getting advice.
When debts are larger than the property
The court may order an unequal division of family property or debt if an equal division would be significantly unfair. Where debt exceeds property value, the court can weigh each spouse's ability to pay a share, and it can look at whether the debt was incurred in the normal course of the relationship.
| Situation | What the law looks at |
|---|---|
| Debt in one spouse's name from during the relationship | It can still be family debt and shared |
| Debt taken on after separation | Family debt only if incurred to maintain family property |
| Debt larger than property | Each spouse's ability to pay and whether the debt arose in the normal course of the relationship |
| Spouses agree in writing | They may divide debt equally or unequally |
What to do next
- List every debt, including the lender, the name on it, the balance and when it was taken on.
- Keep statements showing the balance at separation and any later charges.
- Do not assume your name being absent protects you, or that a written split binds the lender.
- Consider a written agreement that deals with debts and how each will be paid, then have a lawyer review it.
- Prepare financial disclosure. Form F8 is the financial statement required in Supreme Court when claiming property or debt division.
A proceeding to divide family debt must be started no later than 2 years after the divorce judgment for married spouses, or after separation for spouses in a marriage-like relationship.
Frequently asked questions
Am I responsible for a credit card only my spouse used?
It can still be family debt if it was incurred from the start of the relationship to separation, because spouses are equally responsible for family debt unless an agreement or order says otherwise. Facts such as whether it arose in the normal course of the relationship can matter.
Does a court order stop the bank from chasing me?
No. A division between spouses does not bind a lender, and a debt in one spouse's name stays owed to the creditor by that spouse. The court can order indemnities, compensation or security between spouses.
Are debts after separation shared?
Generally not, unless they were incurred for the purpose of maintaining family property.
What if the debts are more than the property?
The court can weigh each spouse's ability to pay a share. A lawyer can explain how that may apply to you.
Sources
- BC Laws – Family Law Act, Part 5 (Property Division) — bclaws.gov.bc.ca
- BC Laws – Family Law Act, Part 10 — bclaws.gov.bc.ca
- BC Laws – Family Law Act, Part 1 — bclaws.gov.bc.ca
- BC Laws – Supreme Court Family Rules, Form F8 — bclaws.gov.bc.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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