Property and Debt
Dividing Debt in a BC Divorce: Who Pays What?
Mandy Shergill20 July 20252 min read
Dividing debt during a BC divorce or separation often creates significant stress and confusion for separating couples. Under British Columbia's Family Law Act, both assets and debts acquired during the relationship are generally considered "family debt" and subject to equal division. However, the reality is often more complex.
What Qualifies as Family Debt in BC?
According to Section 86 of the Family Law Act, family debt includes:
- Joint debts acquired during the relationship
- Individual debts incurred during the relationship for family property maintenance or benefit
- Debt incurred after separation to maintain family property
Equal Division vs. Unequal Division
While the default position is equal division, Section 95 of the Act allows courts to order unequal division if equal division would be "significantly unfair." Key factors include:
Factors Supporting Unequal Division
- Duration of the relationship
- One spouse's post-separation contribution to debt payment
- Circumstances leading to debt accumulation
- Each spouse's ability to pay debt
- Tax consequences of debt division
Common Types of Debt in BC Divorces
Mortgage Debt
Both spouses typically remain liable for mortgage payments until the property is sold or refinanced, regardless of who lives in the home.
Credit Card Debt
Joint credit card debt is usually shared equally. Individual credit card debt may be assigned differently based on when and why it was incurred.
Business Debt
Business-related debt requires careful analysis to determine if it qualifies as family debt or should remain with the business owner spouse.
Steps to Handle Debt Division
- Document all debts: Create a comprehensive list of all debts, including account numbers and balances
- Determine timing: Identify when each debt was incurred (before, during, or after the relationship)
- Assess purpose: Evaluate whether the debt was for family benefit
- Consider separation agreement: Negotiate debt division terms with your spouse
- Seek court intervention: If agreement isn't possible, apply for court orders
Key Considerations for BC Residents
- Act quickly to separate joint accounts and credit cards
- Document all debt payments made after separation
- Consider debt consolidation or refinancing options
- Maintain detailed records of debt-related communications
Legal Disclaimer: This information is provided for educational purposes only and does not constitute legal advice. Every divorce situation is unique, and outcomes may vary. Please consult a qualified legal professional for advice specific to your circumstances.
Get Legal Support
Shergill Law Corporation has experienced family debt lawyers that provide compassionate, practical guidance to protect your financial interests during divorce.
Contact us today for a confidential consultation. Call or visit our website to learn how we can help ensure fair debt division in your divorce.
Frequently asked questions
Am I responsible for my ex's secret debt?
If the debt was incurred during the relationship and benefited the family, you may share responsibility. However, hidden debt incurred through fraud or without family benefit may be excluded from family debt.
What happens to debt incurred after separation?
Post-separation debt is typically the responsibility of the spouse who incurred it, except when used to maintain family property.
Can creditors still come after me even if my ex agrees to pay?
Yes. Creditors aren't bound by your separation agreement. Consider refinancing joint debts individually to protect yourself.
This article is general information about family law in British Columbia. It is not legal advice for your situation. Speak with a lawyer about the facts of your own matter.