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Joint Liabilities and Debts: Dealing With Finances After Separation

Taking the high moral ground and saying “It’s not about money” is fine, but finances do play a major role in relationships.

Assets that have been acquired by either spouse during the course of their marriage including any increases in value of jointly owned and excluded property are presumed to be the entitlements of both parties.

When the marriage is headed for an inevitable breakdown, financial issues can become the subject of much acrimony and dispute. Division of property and assets is not very difficult, provided both parties give complete, accurate and honest disclosure of what they jointly and severally own.

Couples who have been living together in a marriage-like relationship but are not legally married are not entitled to equalization in family property. Ontario’s Family Law regulations apply only to legally married couples and not to common-law marriages, no matter how long the relationship has been. Each partner is however, entitled to whatever they brought with them when they entered the relationship.

Regarding debts and liabilities, married partners have equal shares, unless equalization is unfair to either. In the case of unmarried partners, their debts and liabilities remain their individual responsibility in Ontario. This is not the case in all provinces in Canada, as the regulations may vary under provincial and territorial laws.

An experienced separation lawyer can help you to understand your entitlements and liabilities.

Separation Agreements

In such situations, a separation agreement can play a major role in bringing clarity and finalization. The couple has to sit together, preferably along with a well-qualified, experienced and knowledgeable financial expert and a divorce lawyer or family lawyer to work out the modalities of the agreement.

It’s important that couples, whether married or not, maintain financial records. They should have records of bank statements, insurance plans, tax statements, property documents etc which are owned jointly or separately. This helps to document and divide the assets and liabilities equitably.

Issues Facing Couples

Separation and divorce can be messy and acrimonious. Issues like child-custody/support, spousal support, access to children, parenting, future plans for education and moral training etc can be extremely difficult to manage when the relationship breaks down.

Often, seemingly minor points like who gets to keep the pets can become the bone of contention. Hurt, anger, jealousy and bitterness can be the stumbling blocks to an objective assessment. One or both spouses may not be completely upfront about personal finances.

Experienced divorce lawyers help you to put aside the negative stuff and concentrate on the practical issues.

Tips To Keep In Mind

  • The critical dates involved are the date of marriage and the date of separation.
  • Before separation, it’s wise to close/freeze all joint accounts and open accounts in individual names.
  • Joint credit-cards should be canceled. If there are pending payments on expenses run up on cards by either spouse personally, these should be negotiated and equalized.
  • Creditors should be informed about the separation. If they haven’t agreed to splitting the debts, one spouse will continue getting the bills and payment-demands. Creditors have to agree in writing.

With the right advice and assistance, it’s possible to ensure that a sense of fair play prevails, no matter what the circumstances.

 

CALL US FOR A FREE CONSULTATION

 

Joint Liabilities and Debts: Dealing With Finances After Separation

Taking the high moral ground and saying “It’s not about money” is fine, but finances do play a major role in relationships.

Assets that have been acquired by either spouse during the course of their marriage including any increases in value of jointly owned and excluded property are presumed to be the entitlements of both parties.

When the marriage is headed for an inevitable breakdown, financial issues can become the subject of much acrimony and dispute. Division of property and assets is not very difficult, provided both parties give complete, accurate and honest disclosure of what they jointly and severally own.

Couples who have been living together in a marriage-like relationship but are not legally married are not entitled to equalization in family property. Ontario’s Family Law regulations apply only to legally married couples and not to common-law marriages, no matter how long the relationship has been. Each partner is however, entitled to whatever they brought with them when they entered the relationship.

Regarding debts and liabilities, married partners have equal shares, unless equalization is unfair to either. In the case of unmarried partners, their debts and liabilities remain their individual responsibility in Ontario. This is not the case in all provinces in Canada, as the regulations may vary under provincial and territorial laws.

An experienced separation lawyer can help you to understand your entitlements and liabilities.

Separation Agreements

In such situations, a separation agreement can play a major role in bringing clarity and finalization. The couple has to sit together, preferably along with a well-qualified, experienced and knowledgeable financial expert and a divorce lawyer or family lawyer to work out the modalities of the agreement.

It’s important that couples, whether married or not, maintain financial records. They should have records of bank statements, insurance plans, tax statements, property documents etc which are owned jointly or separately. This helps to document and divide the assets and liabilities equitably.

Issues Facing Couples

Separation and divorce can be messy and acrimonious. Issues like child-custody/support, spousal support, access to children, parenting, future plans for education and moral training etc can be extremely difficult to manage when the relationship breaks down.

Often, seemingly minor points like who gets to keep the pets can become the bone of contention. Hurt, anger, jealousy and bitterness can be the stumbling blocks to an objective assessment. One or both spouses may not be completely upfront about personal finances.

Experienced divorce lawyers help you to put aside the negative stuff and concentrate on the practical issues.

Tips To Keep In Mind

  • The critical dates involved are the date of marriage and the date of separation.
  • Before separation, it’s wise to close/freeze all joint accounts and open accounts in individual names.
  • Joint credit-cards should be canceled. If there are pending payments on expenses run up on cards by either spouse personally, these should be negotiated and equalized.
  • Creditors should be informed about the separation. If they haven’t agreed to splitting the debts, one spouse will continue getting the bills and payment-demands. Creditors have to agree in writing.

With the right advice and assistance, it’s possible to ensure that a sense of fair play prevails, no matter what the circumstances.

 

CALL US FOR A FREE CONSULTATION