Am I Responsible for My Spouse’s Debts?

When separating from your spouse, while you are not responsible to a creditor for your spouse’s individual debts, all debts existing as of the date of separation are included in the calculation of each spouse’s Net Family Property (NFP) for the purpose of equalization.

This means:

- Debts in your name are deducted from your NFP.

- Debts in your spouse’s name are deducted from their NFP.

- Joint debts are typically divided equally for the purposes of the NFP calculation.

The equalization process ensures that the net economic gain (or loss) during the marriage is shared fairly, but it does not transfer legal responsibility for your spouse’s debts to you.

To know how to calculate debts in an NFP calculation, you need to know the different types of debts and how they are treated in family law.

1. Joint Debts

If you and your spouse both signed a credit agreement, such as a loan, mortgage, or credit card, the lender can pursue either of you for the full balance, regardless of the terms agreed upon in your separation. Separation and divorce do not change your legal responsibility to creditors.

Example: If you co-signed a line of credit and your ex stops paying, the lender can still hold you responsible, even if your separation agreement says otherwise.

2. Individual Debts

Debts solely in your name, like personal credit cards, vehicle loans, or personal lines of credit, are generally your responsibility, and those in your ex’s name are generally their responsibility. These debts still factor into your NFP and affect equalization. But a creditor can only pursue you if the individual debt is in your name.

To see an example of how an equalization payment is calculated, and how it considers joint and individual debt, see the chart below:

There are some circumstances that would factor into whether a 50/50 division of the net

family property would be appropriate in the circumstances. Some examples where debts would not be treated as the equal responsibility of the other are:

- The debt was incurred recklessly or in bad faith (for example, through gambling

or dissipation of assets).

- The debt is subject to terms of an agreement. For example, you and your spouse

may have agreed as to how to deal with matrimonial debt in a Marriage Contract or Cohabitation Agreement. However, such agreements do not bind third-party

creditors unless the creditor consents.

You can help to protect yourself from debt after separation by ensuring that your

separation agreement or court order addresses all debts existing in both you and your

spouse’s name at the time of resolution. This way all debts are settled at the time of

resolution so that you can move forward with peace of mind knowing that creditors will not pursue legal action against you for a debt accumulated in your name by your spouse. Obtaining credit reports for both spouses can be a helpful way to ensure that all debts are known to the parties before entering into a final agreement or court order.

Consult a family lawyer to understand your legal rights and obligations relating to debts.

A lawyer can clarify your responsibilities, help you negotiate fair terms, and ensure any

agreement is legally enforceable, reducing the risk of future disputes or surprises.