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Pattie Lovett-Reid

Chief Financial Commentator, CTV


Divorce is never easy and rarely cheap. But for couples who are carrying a lot of debt, it can become even more expensive.

The debt levels of Canadians continue to rise and two income families are struggling as it is. Divorce can compound an already challenging situation and here’s why.  

In Ontario, if you borrow money and the loan is solely in your name the responsibility to repay the loan rests solely on your shoulders. When a loan is joint only then do both spouses share in the repayment. Sadly, all too often this isn’t taken into consideration when the loan originates. No one likes to think that down the road things could be emotionally and financially different, and result in unintended consequences.  

These are the top impacts of household debt on couples going through a divorce, according to Shulman Law Firm:

  • Selling the matrimonial home sooner than expected
  • If children are involved, they may be forced to leave their schools and neighbourhoods
  • Settlements and negotiations become more adversarial
  • No time to properly investigate assets or income that is important in support obligations.

The challenge is that many people are living beyond their means and once they separate, the reality of a reduction in lifestyle can hit hard and add to this repayment of a family loan that now becomes your sole responsibility.

Divorce is clearly emotional, but marrying one wrong partner could also prove to be the most costly financial decision of your life.

Shulman says that in Ontario, the following is considered to be your property on the day you separate:

  • Your property is anything in your name
  • This includes property in other parts of the world
  • Ontario pension is included in a list of assets
  • If property is jointly registered, each claims half the value

When couples decide to call it quits, a separation agreement is often crafted and the details need to be closely reviewed.

A little planning even here can go a long way.