The laws and rules of debt division and property division apply to married couples going through a divorce, or non-married couples who have lived together in a marriage-like relationship for at least 2 years. Both these kinds of couples are called spouses under the law. Whenever these spouses are going through a separation, they must divide family debt and family property equally among the two spouses. However, if an arrangement is already in place that states that the property and debts need to be divided differently, then that rule will be followed.
Under the provincial Family Act, spouses are presumed to keep the property that each of them brought into the relationship. However, any property, assets, or debts acquired during the relationship have to be shared or divided between the two.
Section 86 of the Family Law Act defines any debts that either spouse took on during the relationship up to the date of their separation, fall under family debt. These include mortgages, credit cards, loans from family members, income tax, bank lines of credits or overdrafts, as well as repair costs. Any debts taken on after separation, if the money was spent on taking care of family property, such as for paying taxes, that will also be included in family debt.
Both spouses are equally responsible for family debt, whether they are married, or are in a common-law relationship. Therefore, it does not matter whose name the debt is in.
In some cases, the court may order the unequal division of family property or debt, only if dividing the debts or property equally would be considered “significantly unfair”. In such cases, the court will consider a number of factors such as how long the relationship lasted, if any other arrangements were made between the spouses that were signed and witnessed, how the family got into debt, if the family debt is more than the family property and so on. Some other factors that are considered here each spouse’s ability to pay a share of that debt, how much each spouse contributed to the other spouse’s career or career potential, or if one spouse did something o raise or lower the family debt or property value after the separation. Unequal division of family debt and property is defined under Section 95 of the Family Law Act.
Unmarried spouses must apply to divide family property or debt within two years of the date on which they separated. Married spouses must apply for division of family property or debt no later than two years after getting an order for divorce or annulment.
If you are going through a divorce in Scottsdale, you need to get in touch with a Scottsdale Family Law attorney. The Cantor Law Group is highly accomplished and has well-known attorneys that are committed to providing the highest quality of legal counsel to separating or divorcing couples. Call the Cantor Law Group at (602) 254-8880 for a Free Initial Consultation.
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