What happens to family debts when spouses separate?

How debt is divided

When spouses separate, all family debts are shared equally, unless the couple has an agreement that says something else.

Family debts are all debts that either you or your spouse took on during your relationship. They also include debts taken on after separation to maintain family property. It does not matter whose name the family debt is in.

Family debts include:

  • Mortgages
  • Loans from family members
  • Bank lines of credit or overdrafts, credit cards
  • Income tax
  • Repair costs

When debt can be divided unequally

If you go to court and ask a judge to decide, the judge will order that family debts be divided equally unless it would be “significantly unfair” to do so.

Some of the things a judge would consider include:

  • How the family debt was incurred
  • If debts are worth more than the family property, the ability of each spouse to pay a share of the family debt
  • Whether one spouse, after the separation caused a decrease or increase in the value of family debt

Note: If you have a joint debt, creditors can look to one or both spouses for payment.

If a credit card or loan, etc., is in your name only, creditors will consider you solely responsible for the payments. They will seek payment from you, regardless of what your agreement is with your spouse.

If you have joint credit cards with your former spouse, you can cancel your card for the joint account. If you have a line of credit with your former spouse, review your options with your financial institution. Be careful not to do anything that looks unfair.

More information

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