Dividing Debt During Your Separation
When separating, dividing up assets is only half the equation. You also need to look at debts and liabilities; things like mortgages, credit cards, loans, and lines of credit.
Under the Family Law Act, debts are treated much like assets: they’re considered shared family obligations, even if the debt is only in one person’s name.
What Is considered “family debt”?
Family debt includes any financial obligation that was incurred during the relationship (marriage or cohabitation); or was used to support the family, maintain property, or cover joint expenses. This includes:
Mortgages on the family home or investment properties
Lines of credit or loans, even if only one spouse’s name is on the account
Credit card balances
Car loans, student loans, or personal loans
Any other debts used for the benefit of the household or relationship
What time period counts?
Family debt usually includes any debt that was incurred during the relationship, and
is still existing on the date of separation. In some cases, debts taken on after separation can still be considered family debt if they were used to maintain family property (e.g., mortgage payments, taxes, or urgent repairs).
How is family debt divided?
Just like family property, family debt is generally divided equally (50/50) between spouses, unless you both agree to divide it differently, or a court finds that equal division would be significantly unfair.
The goal is to balance both assets and liabilities, so that each person walks away with an equal share of the net family property. This means that debt balances against assets and an overall equalization payment is calculated to make things fair.
Divii will help you balance all of this in the Property Schedule.
What about debts in only one spouse’s name?
Even if the credit card or loan is only under one person’s name, it still considered shared family debt if it was used for household expenses or family-related purchases or it was taken on during the relationship.
On the flip side, personal debts that only benefit one spouse, like gambling losses or secret spending, may not be shared.
How Divii Helps with Debt division
Divii makes it simple to:
List all debts: Add everything from mortgages to credit cards
Assign ownership: Mark debts as yours, your spouse’s, or shared
Track totals: See how debts affect your share of family property
Calculate equalization: Automatically balances assets and debts to show any payout required
Everything stays organized, transparent, and ready for legal review.
Remember: It's always advisable to seek independent legal advice during your separation. A Family Lawyer can help you understand your rights and help you ensure all liabilities are fairly divided.
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Important Disclaimer
Content and videos in The Divii Knowledge Centre provide general information about separation and divorce and is not and should not be considered legal advice. For guidance specific to your situation, it's important to consult with a qualified family lawyer in your area. It's always highly recommended to seek independent legal advice during your separation.