Who Is Responsible for Debts After Separating in British Columbia?

If you have just separated, joint credit cards, a line of credit, a car loan or a debt in your partner's name alone can feel like a threat to your finances. It is natural to ask who has to pay and what you can do to protect yourself.

This article explains how British Columbia's Family Law Act treats debt between spouses. It does not cover how a particular lender will treat you under your account contract, so that is worth raising with a lawyer or the lender directly.

This article covers the law of British Columbia.

What counts as family debt

Spouses are both entitled to family property and responsible for family debt. Family debt includes all financial obligations incurred by a spouse from the start of the relationship until separation.

The wording is about debts incurred by a spouse, so a debt in only one person's name can still be family debt. Who signed the credit agreement is not the only question.

These rules apply to spouses. Under the Family Law Act you are a spouse if you are married, or if you have lived in a marriage-like relationship for a continuous period of at least 2 years. The exception for unmarried parents who have a child together does not apply to property or debt division.

Debts taken on after separation

Debts incurred after separation count as family debt only if they were incurred to maintain family property. A new credit card balance for your own spending after separation is generally a different question from a mortgage payment that keeps the family home.

That makes the separation date important. There is no such thing as a legal separation: a couple is separated if they stop living together, and they can be separated under one roof if a clear intention of permanent separation has been communicated and acted upon. The Family Law Act says spouses may be separated despite continuing to live in the same residence.

Getting back together can complicate the date. For property division, spouses are not considered to have separated if, within one year after separation, they begin living together again with the primary purpose of reconciling and continue to live together for periods totalling at least 90 days. If the reconciliation totals less than 90 days, or the main purpose was not to reconcile, the original separation date stands.

How debt is divided

When deciding whether to divide unequally, the court may consider factors such as the length of the relationship, contribution to the other spouse's career, whether the debt was incurred in the normal course, and changes in value after separation.

Time limits and where claims are heard

Claims for property or debt division must be started within 2 years. For married spouses the period runs from the divorce judgment, and for unmarried spouses in a marriage-like relationship it runs from the date they separated. BC government guidance describes the same two-year periods.

A spouse may apply for orders about property and debt at any time before a final agreement or final order is made on property division. Property division is heard in the Supreme Court, because the Provincial Court does not deal with Part 5 property division except for companion animals.

What to do next

• List every debt, noting whose name it is in, when it was taken on and what it was for.
• Work out and write down your separation date, and keep records that show it.
• Gather statements for joint accounts, loans, lines of credit and mortgages.
• Keep track of any debt you take on after separation and whether it maintains family property.
• Speak to a lawyer before signing anything that settles debt with your spouse; BC government guidance says this is very important and recommends independent legal advice.
• Ask a lawyer or the lender about your options for joint credit accounts, since that depends on your account terms.

Frequently asked questions