On behalf of Gary Kirk of Kirk Montoute Dawson LLP posted in Family Law on Wednesday, June 1, 2016.
Most people approaching divorce worry about whether the division of property will be fair and allow them a decent lifestyle. What is sometimes even more important is that the division of debts in divorce be equitable, because property a person is awarded in a divorce can be quickly depleted to pay down debt, seriously impacting the divorced spouse’s standard of living.Â
Debt: a societal problem
The recent economic downturn impacted many Canadians, who may still be struggling to pay off resulting debts. Three-quarters of Canadians carry debt at the present time, according to a new poll of about 1,000 Canadians by market researcher Ipsos on behalf of the accounting firm BDO.
Other findings about Canadian debt levels from the survey:
- One-quarter have a good deal or a lot of consumer debt.
- Canadians are most likely to have higher levels of consumer debt in the 35-54 age range.
- One-quarter believe they will never become debt free.
- Of those with debt who believe they will become debt free, the average estimate of how long it will take to get there is just over eight years.
- About half blame the rising cost of living for negatively impacting the rate at which they have been able to pay down debt, especially among younger Canadians.
- More than half of Canadians polled believe their home values will rise, but Alberta homeowners are significantly less optimistic about their homes holding value, having recently experienced increased unemployment, declining oil prices and the Fort McMurray fires.
Division of debt in divorce
In Alberta, division of debt and property is governed by the Matrimonial Property Act, which normally divides them both equally if acquired jointly or by either party during marriage, subject to some exceptions.
Both parties are required to disclose all property and debt during the divorce process and unfortunately, it is not all that uncommon for one spouse to be hit with the news that the other has taken on debt and kept the information private. This may happen in a marital arrangement where one spouse is the main provider, managing the money and exclusively paying the bills, or sometimes a spouse may have problems controlling spending on things like shopping or gambling.
An experienced family lawyer will advocate for his or her client in divorce for fair debt division in negotiation toward settlement or at trial, if necessary.
Related Posts: Understanding home ownership and property rights in a divorce, Travelling without children during a family law dispute, Set boundaries and rules to protect kids from child custody drama, Protecting credit amidst a family law dispute