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Separation and Divorce: A Comprehensive Guide on Dividing Property and Debt


Most people do not enter a marriage or a common-law relationship intending to divorce or separate because divorce or separation is usually complicated and emotionally draining. Legal considerations surrounding property and debt division are often significant sources of contention and distress. Whether married or in a common-law relationship, the laws and regulations regarding property and debt division vary from province to province in Canada.

This comprehensive guide will explore the rules and regulations surrounding property and debt division when relationships break down. We will delve into key concepts such as:

  • family property
  • excluded property
  • pets
  • pensions
  • family debt, and
  • the factors influencing an equal or unequal division.

So, let’s dive in and gain a deeper understanding of the laws that govern property division.

Understanding Family Property

Family property encompasses all assets you and your spouse own on the date of separation, with some exceptions known as excluded property. These assets include the family home, additional properties, investments, bank accounts, insurance policies, pensions, and businesses. It is important to note that family property does not solely depend on the name on the ownership documents; the law recognizes it as joint property regardless of the title.

The definition of family property extends beyond assets acquired during marriage or cohabitation. If you owned property before entering the relationship, it can still be considered family property, but with certain conditions. For example, if the value of the property increases during the relationship, the increase is considered family property and subject to division in the event of separation. Furthermore, as explained below, pets are considered more than just property.

Excluded Property 

Excluded property refers to assets not considered family property and, therefore, exempt from equal division. This includes any assets owned by either spouse before entering the relationship and gifts or inheritances received by only one spouse. It’s important to understand that while the excluded property is not subject to equal division, any increase in its value during the relationship may be considered family property.

To illustrate this, let’s consider an example. Suppose you owned a house before entering the relationship, and its value was $250,000 at the start of the cohabitation or marriage. If the house’s value increases to $450,000 at the time of separation, the $200,000 increase would be considered family property and subject to equal division.

It’s worth noting that tracing the value of the excluded property can be complex, and seeking legal advice is advisable to ensure a fair and accurate assessment.

Determining Family Debt 

In addition to property, the division of debt is an essential aspect of the separation process. Family debt includes any debts incurred by either spouse during the relationship, such as mortgages, loans, credit card debts, and taxes. It’s important to note that both spouses are equally responsible for family debt, regardless of whose name is on the debt.

Even after separation, if the debt was acquired to maintain or improve the family property, both spouses remain responsible for its repayment. It’s crucial to communicate with creditors and inform them of the separation to clarify each person’s responsibility for debt repayment.

Excluded property can be complex, and seeking legal advice is advisable to ensure a fair and accurate assessment.

Even after separation, if the debt was acquired to maintain or improve the family property, both spouses remain responsible for its repayment.

Equal Division of Property and Debt

In most cases, the law requires an equal division of family property and debt between spouses upon separation. This means that each spouse is entitled to half of the net value of family property and is responsible for an equal share of family debt.

However, note that an equal division may not always be applicable. The court may consider an unequal division if it would be significantly unfair to one spouse to divide the property and debt equally. In such cases, the court examines various factors to determine whether an unequal division is justified.

Some factors considered by the court include the duration of the relationship, any agreements made between the spouses, the source of family debt, the value of family debt compared to family property, each spouse’s ability to pay a share of the debt, and any actions taken by either spouse to increase or decrease the value of property or debt after separation

Division of Pensions

In British Columbia, the rules for dividing pensions apply to married and unmarried couples living together in a marriage-like relationship for at least two years. The division of pension benefits can be complex and depends on whether the pension has commenced by the time the relationship ends and the type of pension plan.

Given the complexity of pension division, seeking legal advice is strongly recommended to ensure a fair and accurate assessment.

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Dividing Pet Custody


In British Columbia, the Family Law Act has been amended to recognize pets as more than just property during divorce or separation. The changes acknowledge that many pet owners view their pets as part of the family. The new amendments classify pets as “companion animals” and provide courts with specific guidance on handling pet custody cases. When determining pet custody, factors such as how the pet came into their lives, who cared for the pet, any history of family violence, and the relationship between a child and the pet will be considered. Developing a pet custody agreement and utilizing mediation or collaborative law processes can help avoid or resolve conflicts. Common law couples also have the option to go to the Provincial Court for pet custody matters. Considering the impact of pet custody on children can inspire parents to integrate the pet custody agreement into the overall family law strategy. Adapting to the changes in pet custody law may seem daunting, but it is possible with enough information and a conciliatory mindset.

Time Limits for Division of Property and Debt

There are specific time limits for making a claim to divide property and debt, depending on the type of relationship. For married couples, the claim must be made within two years after obtaining an order for divorce or annulment. For unmarried couples in a common-law relationship, the claim must be made within two years of the date of separation.

Awareness of these time limits can determine your future, as is taking steps to protect your rights and interests within the designated timeframes.

Seeking Legal Advice

Navigating the complexities of property and debt division can be overwhelming, especially during an already challenging time. It’s highly recommended to seek legal advice from a lawyer specializing in family law to ensure that your rights are protected and that you receive accurate guidance tailored to your specific circumstances.

A lawyer can provide guidance on your entitlements, explain the applicable laws, help you negotiate a fair settlement, and represent your interests in court if necessary. Dismissing the value of legal advice in these matters could rob you of making the best decisions and ensuring a smooth process during a divorce or separation.

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Divorce or separation can be an emotionally charged and challenging time. One of the fundamental things you can do is to be informed about your rights and identify the areas that need protection.

It can be hard to understand what is deemed property, concepts such as family debt, and the key factors that determine what is included in the division of family property. Consult a legal professional to obtain advice tailored to your situation because the information provided in this guide is for general informational purposes only and should not be considered legal advice.

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