Divorce is never easy for anyone. It is difficult to handle everything unless you have the right legal team to support you. There is one very important question about divorce that who pays the debt after the separation or divorce? So, this article will describe the types of debt that are included in a divorce, how debt is divided in British Columbia, and how both parties can work toward a just resolution.
How is Debt Divided in BC?
In BC, the rules for dividing property as well as debt during a divorce are set by the Family Law Act effectively. If you examine the previous case, both individuals are equally responsible to pay back the loan that they had borrowed for any reason during the marriage, no matter who took the loan. If you are married, then the debt will be split equally between both.
What Types of Debt are Included?
- Mortgage Debt
- Credit Cards
- Loans
- Business Debt
- Unpaid Taxes
- Other Debts
Unequal Division vs. Equal Division
The law normally splits things equally, but according to Section 95, the court can divide them unequally if equal division is unfair.
Factors Supporting Unequal Division:
- How long did the relationship last
- If one person paid more of the debt after the separation
- What was the reason for taking debt
- Each person’s ability to pay the debt
- Any tax problems caused by splitting the debt
Who is Responsible for the Debt?
If one of the partners borrowed money or used a credit card for family or household needs, both spouses must pay it back, as family or household is the responsibility of both. The court aims to divide the money and debt fairly between the individuals.
Is It Possible to Settle Debt Without Going to Court?
The answer is Yes. Many individuals settle the debt issues without involving the court, because it takes a lot of time and money. They simply hire a lawyer or financial advisor to handle the process. You may prepare a separation agreement that specifies exactly who is responsible for paying which part of the debts.
The agreement must include:
- List all current debts accurately
- Include account details, amounts borrowed, and the plan for repayment
- Decide how to manage shared liabilities or joint debt.
Who Has to Pay the Debt After Separation?
After separation, if anyone takes a new loan, it is usually paid by the person who borrowed it. But if the money was used for some special reasons, like rent or the cost of kids, both people might have to share the responsibility.
Conclusion
Divorce is always a difficult decision. The question that comes to mind is how your debt will be divided in a divorce. If you initially understand the complete process, you can make everything easier for yourself. If you are looking for expert help, then you are in the right place. Contact family law experts and get a top-level help.
