Joint Accounts and Debts After a Common-Law Split in Ontario

When a common-law relationship ends, money questions come up fast. Who can take what out of the joint account? Who has to pay the credit card? What happens to the loan you both signed for?

The answers depend heavily on whose names are on each account and contract. This article walks through how joint accounts, cards, loans and a jointly owned home are generally treated, and what to do in the first days.

The starting point for property

Ontario does not divide property between common-law couples when they separate. Each partner keeps the property they bought, and neither has a right to share the other's increase in property value. Furniture, household items and other property belong to the person who bought them.

A partner who contributed to property the other owns may have a right to part of it. Unless the owner agrees to pay the contribution back, that partner may have to go to court.

Debts work differently from property. Whether you owe a debt generally comes down to what you signed. Living together does not by itself make you responsible for a loan or card that is only in your partner's name, but a lawyer can confirm how that applies to your situation.

Joint bank accounts

Joint bank account holders share responsibility for all transactions. For example, an overdraft may create a debt for everyone on the account. That is true even if your partner made all of the withdrawals.

Who ultimately owns the money in the account is a separate question. It can depend on who deposited the funds and what you both intended, and that is worth confirming with a lawyer if the balance is significant.

If you are worried your partner will empty the account, or that a bill will overdraw it, consider these steps:

• Download and save statements for as far back as the bank allows.
• Move your own pay and benefits into an account only you control.
• Ask the bank what is needed to change how the account operates or to close it.
• Cancel pre-authorized payments you do not want charged to the joint account.
• Avoid taking out more than you can explain, and keep a record of any transfers.

Credit cards and loans

Co-borrowers on a joint credit card can use the account and are equally responsible for the balance. Someone who is only an additional cardholder is not responsible for repaying money owing on the credit card account.

Loans, lines of credit and car financing follow the contract. Read what you signed: were you a borrower, a co-borrower, or a guarantor? How a split affects a lender's rights, and whether an arrangement between you and your partner matters to the lender, depends on the contract and your situation, so it is worth confirming with a lawyer. Ask the lender what your options are, and get that in writing.

A jointly owned home

If you both own the home, the way you hold title matters. Joint tenancy is co-ownership with a right of survivorship. Under a tenancy in common, each owner holds an undivided interest that does not end on their death, so there is no right of survivorship.

Be careful about one owner mortgaging the property alone. In the land titles system, a charge registered by fewer than all the joint tenants does not automatically sever the joint tenancy. Whether the owners intended to sever is a factual question for the courts.

Because the matrimonial home rules do not cover unmarried partners, your rights in a shared home come from title, any agreement you have, and the contribution rules described above. Do not sign a transfer or sale document without advice.

What to do next

• List every joint account, card, loan, line of credit and mortgage, with the names on each.
• Check each contract to see whether you are a borrower, co-borrower, guarantor or additional cardholder.
• Keep copies of statements and records of who paid what.
• Look for any cohabitation agreement; it may deal with property and support and must be written, signed and witnessed to be enforceable.
• Do not close or drain accounts in a hurry; talk to a lawyer first.
• Ask a lawyer or accountant about tax, since your status for CRA purposes may change when you separate.

Frequently asked questions