Matrimonial Debts Incurred After Separation

matrimonial debt, division, assets, separation, agreement, Family Property Act, Matrimonial Property Act, married, couple, debts, joint expenses, home, property, common law, post-separation liability, spousal support, credit card, family expense, spouse, separation, vacation, shared, nexus

Matrimonial Debts Incurred After Separation

A frequent question asked of our family law lawyers who focus on the division of matrimonial assets is “what happens with matrimonial debts incurred after separation?”. Understanding the law surrounding this issue allows parties who are separating or divorcing to act in a way that protects themselves and their family. This understanding also helps prevent people making bad choices. If you have any further questions, please feel free to reach out to our family law team. With an office in both Calgary and Edmonton, Kahane Law Office offers a range of services. You get to pick. We help with simple single session consultations to help you understand your current legal situation. We also help with full negotiations and / or trials, including disputes over matrimonial debts incurred after separation.

Your Responsibility For Your Partner’s Matrimonial Debts Incurred After Separation

In Alberta, marital/relationship property is divided in accordance with the Family Property Act(Alberta), which came into force on January 1, 2020.  If you and your spouse/partner separated after January 1, 2020 the Family Property Act (Alberta) sets out the framework used to divide your assets and debts.  Other laws apply in the event you and your spouse separated before January 1, 2020. In this case the predecessor legislation, the Matrimonial Property Act (Alberta)  applies to married parties.  For married couples the scheme in both cases remains relatively the same, with some minor changes.

In Alberta, marital property includes assets acquired during the marriage, as well as matrimonial debts incurred after separation.  Often when a couple separates, it can take several months to arrive at an agreement with respect to how your assets and debts will be divided.  One question many people have is: What happens if my spouse incurs debt after separation? Am I liable?  The answer is, it depends.

Below are a few common questions and the answers to those questions. However, because the answer depend on the specific facts of your case, always obtain comprehensive legal advice based on your specific situation.  The lawyers at Kahane Law Office are happy to set up a consultation appointment to review your specific situation. For example, current concerns couple have include:

Responsibility For Matrimonial Debts Incurred During A Marriage But Not In Your Name

This debt situation is the most normal and easily divided. If the debt was incurred during the marriage, then that debt is divisible equally with your spouse whether the debt is in your name, joint names, or your spouse’s name alone.

Responsibility For Spousal Debt Incurred Before The Relationship / Marriage

Next, this situation becomes more complex. Generally speaking, if your spouse brought debt into the relationship which still exists at separation, you will not be responsible for any portion of that outstanding debt. The balance that remains will be their sole responsibility. People easily lose the protection of this rule when the make certain financial decisions. Consequently, this means that understanding things at early stages of the relationship is key to protecting yourself.

Your Responsibility For Credit Cards/Lines Of Credit You Knew Nothing About

If the debt was incurred during the marriage, you have responsibility for the debt whether or not you knew of this rule.  The Court does not accept the argument that you did not know about your partner’s credit card debt throughout the relationship.  This is why it is important to always stay informed of each other’s finances. Please see below for matrimonial debts incurred after separation on new credit cards.

Responsibility For Spousal Debt Incurred By Both Spouses To Pay Joint Expenses After Separation

Next we look at matrimonial debts incurred after separation. For debts incurred to meet ordinary living expenses, most often that debt is shareable equally. Its treatment is the same as division matrimonial or family property. However, the complexity increases in other situations. If that joint expense is the matrimonial home they live in or property they solely benefit from.  This issue requires specific review by a lawyer to arrive at the correct result.

Responsibility For Matrimonial Debts Incurred After Separation For Joint Expenses But Only In My Spouse’s Name

If you are married or qualify as common law, it does not matter whether the debt is in joint names, or in your spouse’s name only. In these cases, you usually retain liablity for matrimonial debt incurred after separation to pay for joint expenses.

Responsibility Of Matrimonial Debts Incurred After Separation On New Credit Cards

Lastly, the Courts in Alberta generally rule that unless the debt was incurred in relation to a joint marital asset or for a joint marital purpose, post-separation liabilities will be the sole responsibility of the party that incurred the debt.  If the Court cannot find a nexus between the debt and the expenses of the family, liability rests with the party incurring the debt.  For example, if your spouse took a vacation to Vegas using the new VISA after separation. In this case, the court treats the debt differently than family or marital debt. Therefore, the debt remains the liability of the spouse who incurred the debt.

Treatment Of Debts Incurred To Support Myself And/Or Our Children Due To Non-Payment Of Child Or Spousal Support

If your spouse fails to pay adequate child or spousal support under the law, different rules apply. In situations where you incur debt to support yourself and your family, generally, the law requires an equal sharing of the debt.  What is important is that you show a nexus. The nexus must connect the debt and whether it was for a joint marital purpose. The court is understanding of these non – matrimonial debts incurred after separation.

Getting Help With Dividing Matrimonial Debts Incurred After Separation

Debt can be a very stressful topic for couples to discuss, and a complicated issue when dealing with the division of your marital property. It is always a good idea to obtain comprehensive legal advice when you and your spouse separate. This allows you to understand your rights and obligations to and from your spouse.  Reach out to book a consultation appointment with one of the Family Lawyers at Kahane Law Office. Feel free to contact us and we would be happy to help.You can reach us locally in Calgary at (403) 225-8810 or in Edmonton at (780) 571-8463 , or email us directly here.