Divorce & separation

How to write your own separation agreement

Section 6: Debts (Optional)

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After you separate, both you and your spouse are responsible for any financial obligations that either of you took on during your relationship, unless you agree otherwise. This is called family debt, and includes:

  • mortgages,
  • loans from family members,
  • bank lines of credit or overdrafts,
  • credit cards,
  • income tax, and
  • repair costs.

Family debt also includes financial obligations taken on after separation if the money was spent to take care of family property.

When dividing family debt, it doesn't matter whose name the debt is in. This applies whether you are married or you lived in a marriage-like relationship for at least two years. But, it's important to know whose name the debt is in for anyone who wants to collect on the debt. The person or institution you or your spouse owe money to can only collect against the person who took on the debt.

A court will divide debt unequally if it would be significantly unfair to divide it equally. For more information, see our fact sheet How to divide property and debts.

If one of you challenges your earlier agreement, the judge/master will look carefully at how you reached that agreement. (For example, was all information shared? Did one party take advantage of the other?) The judge will also look at whether the agreement is "significantly unfair." For more information, see our fact sheet Making an agreement after you separate.

Important: You must share information about all your debts, so they can be dealt with fairly and your agreement will stand up in court.

Not all types of financial obligations are covered in this section. Other options are available in the CLEBC manual.

Your basic information

In the Short name text boxes, enter the short names for you and the other party. Use the same short names you entered in the Introductory clauses.

Once you've entered your names, they will appear below in place of Party 1, Party 2, or Name.

List of debts

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The first thing you need to do is describe each type of debt and give it a name. You will use this name to refer to that debt throughout the rest of this section. Start by first naming all of your joint debts. Then each of you will list all of your individual debts.

Joint debts — Instructions

Joint debts are things like money owing on joint credit cards and joint lines of credit. They also include debts to businesses (like banks or a car dealership) or individuals (parents, friends) where you both signed to take on the debt.

Use as many paragraphs as you need to set out each type of debt. Describe the debt in detail using the fields provided. Include:

  • the type of debt (credit card, line of credit, personal loan, etc.)
  • who it is owed to (which bank or financial institution, or person)
  • how much is owed on the debt as of a specific date

For example, "The parties have a joint BankCo ChargeCard with a balance of $2,000 owing as of June 30, 2014." Or "The parties have a personal loan from Jane Doe. As of June 30, 2014, $500 is owed."

Tip: Remember that all the paragraphs below are automatically included in your text file unless you click Don't include. If you change your mind, you can always include the paragraph again by clicking Include.

  1. Decide how many paragraphs apply to your situation. Click Don't include for the paragraphs that don't apply.
  2. For paragraphs 1 – 6, in the text box, enter the debt details (as above).

Joint debts

The parties have a .

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Individual debts

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Individual debts are those where only one party has taken on the debt. For example, you might each have credit cards in your own names, or individual lines of credit. One of you may have taken out a car loan.

But even debts that you've taken on individually are divided equally if they're taken on during the relationship, unless you've agreed otherwise. Or unless dividing it equally would be significantly unfair.

Use as many paragraphs as you need to set out each type of debt. Describe the debt in detail using the fields provided. Include:

  • the type of debt (credit card, line of credit, personal loan, etc.)
  • who it is owed to (which bank or financial institution, or person)
  • how much is owed on the debt as of a specific date

For example, "John has a CreditCo line of credit with a balance of $5,500 owing as of June 30, 2014." Or "Joan has a BC student loan. As of June 30, 2014, $10,000 is owed."

  1. Decide how many paragraphs apply to your situation. Click Don't include for the paragraphs that don't apply.
  2. For paragraphs 7 – 12, in the text box, enter the debt details (as above).

Name has a .

Party 1
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Responsibility for particular debts

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You can set out who is responsible for paying which debts. You can divide the debts between the two of you, and/or you can specify that each party is responsible for specific debts. For example, you could specify that each party is responsible for all the debts in their own name.

  1. Decide which paragraphs apply to your situation. Click Don't include for the paragraphs that don't apply.
  2. If you want to share responsibility for joint debts equally and each pay your own individual debts, include paragraph 13.
  3. If you want to specify which debts each party is responsible for:
    1. Include paragraphs 14 – 23 (as applicable).
    2. For paragraph 14, click the name of the party who will be responsible for paying some or all of the debts. The field updates with the party's name.
    3. For paragraphs 15 – 18, in the text boxes, enter the debt details and the amount.
    4. For paragraph 19, click the name of the party who will be responsible for paying other debts. The field updates with the party's name.
    5. For paragraphs 20 – 23, in the text boxes, enter the debt details and the amount.
  4. If you want to specify that each party will pay a specific portion of the amount on some or all the debts listed:
    1. Include paragraphs 29 – 33 (as applicable).
    2. For paragraphs 30 – 33:
      1. In the first two text boxes, enter the debt details and the amount.
      2. Click your names so that the field updates with your names as you want them to.
      3. In the last two text boxes, enter the percentage of the debt or the amount each party will pay.
  5. If you want to specify that neither party can increase the amount borrowed on some or all of your debts:
    1. Include paragraphs 34 – 38 (as applicable).
    2. For paragraphs 35 – 38, in the text boxes, enter the debt name that you've used in the earlier paragraphs and the amount.

Party 1 and Party 2 will each pay their individual debts as listed above. Party 1 and Party 2 agree to divide all joint debts equally.

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Party 1 will be responsible for paying the following debts:

Party 1
Party 2
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in the amount of .

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in the amount of .

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in the amount of .

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in the amount of .

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Party 2 will be responsible for paying the following debts:

Party 1
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in the amount of .

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in the amount of .

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in the amount of .

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in the amount of .

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Each party will be solely responsible to pay their own personal debts and liabilities:

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in the amount of .

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in the amount of .

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in the amount of .

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Each party is responsible for paying a specific portion of the amount on some or all the debts listed as follows:

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in the amount of . Party 1 will pay and Party 2 will pay .

Party 1
Party 2
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in the amount of . Party 1 will pay and Party 2 will pay .

Party 1
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in the amount of . Party 1 will pay and Party 2 will pay .

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in the amount of . Party 1 will pay and Party 2 will pay .

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Neither party will increase the amount owed on the following accounts:

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in the amount of .

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in the amount of .

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in the amount of .

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Taxes owed

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  1. Decide which paragraphs apply to your situation. Click Don't include for the paragraphs that don't apply.
  2. For paragraph 37, click the name of the party. The field updates with their name. Then, for paragraphs 38 and 39, in the text boxes, enter the tax details and the amount.
  3. For paragraph 40, click the other party's name. The field updates with their name. Then for paragraphs 41 and 42, in the text boxes, enter the tax details and the amount.

Party 1 has disclosed all information about any tax they owe, including interest and penalties. These are as follows:

Party 1
Party 2
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in the amount of .

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in the amount of .

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Party 2 has disclosed all information about any tax they owe, including interest and penalties. These are as follows:

Party 1
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in the amount of .

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in the amount of .

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Except as otherwise provided in this agreement, each party will:

  • take responsibility for paying all of their taxes, interest, and penalties owing
  • pay their own income tax as assessed for the current year

If either party fails to comply with this paragraph, they will pay the other party for any expense or loss they suffer as a result.

Closing accounts

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If you have any joint accounts, it's a good idea to specify that they'll be closed once the agreement is signed.

  1. Decide which paragraphs apply to your situation. Click Don't include for the paragraphs that don't apply.
  2. For paragraphs 44 – 46, in the text box, enter the joint accounts and the associated bank or financial institution.
  3. Review all of the information you've included throughout this section to make sure it's correct. Then:
    1. Click Open text version. A text copy of this section of the agreement will appear in a new browser window.
    2. Copy and paste the text into a word processor.
    3. Go through the section and number each paragraph/clause. Continue the numbering from where you left off with the previous section. Be sure to save your file.

When this agreement is signed, the parties will close the following joint accounts:

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