Like the marital property that will be divided between spouses when they divorce in British Columbia, the debts the couple have incurred are also similarly divided in the property division order. Debts are considered to be family debts if they happened anytime during the relationship.
Debts that occur after the date of separation may also be considered to be divisible if they are incurred to benefit family property. The value of the family property and family debt either as of the date of an agreement regarding the division or upon a hearing in the court.
Courts allow people to make decisions concerning their property and debt division, whether the agreement provides for an equal or an unequal division. At a hearing, the court will generally divide debt and property equally but may deviate if it would make the proceeding more equitable. In deciding to assign more debt or property to one spouse, the court looks at several factors, including the length of the marriage, how a spouse has contributed to the other spouse’s career or potential for a career, and whether the debt accrued as a normal part of the marriage. The court may also consider the ability of each party to pay his or her share, whether one caused property to decrease in value and any resulting tax liabilities a transfer might cause.
Debt and property division can be one of the most problematic issues a person will deal with in a divorce. A family law lawyer may be able to help negotiate an agreement regarding debt and property division in a manner that best protects his or her client’s interests. If there is a significant difference in income between one spouse and the other, a lawyer may negotiate an agreement through which the higher-earning spouse assumes a greater percentage of the debt while also taking a larger share of the property.