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Debt part deux

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  • Debt part deux

    In light of the earlier thread in regards to commonlaw debt I thought I'd ask how the law treats it if you were in fact married. Scenario is this, on top of debt in both names I have a credit card only in my name, as does my ex-wife. How does debt in only one spouse's name impact equalization etc? Is it included in the calculations, or is it outside of these?

    Should thank everyone else for questions, I've been lurking reading for quite some time now and have found the help invaluable.

  • #2
    If you are married, it does not matter whose name is on the debt, including tax debts. They are treated the same as debts in both your names, split 50/50, just like assets.

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    • #3
      My ex hadn't filed taxes while I did and now he owes back taxes. I was told by Canada Revenue that it is seperate even if you are married unless you file jointly.

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      • #4
        Interesting. So it appears as if CRA has specific rules in regards to how it was filed. However consumer debt is treated differently. Interesting the split between the two. I'm guessing if needed the back tax debt would become the subject of negotiation/litigation then.

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        • #5
          Originally posted by 2boys View Post
          My ex hadn't filed taxes while I did and now he owes back taxes. I was told by Canada Revenue that it is seperate even if you are married unless you file jointly.
          CRA is simply saying that they will come after the person who owes the tax, not their spouse. Who CRA says owes the tax is irrelevent as to whether it is a debt of the marriage (which it is).

          Same for any other debt, if you are married, get a credit card in your name only, it is a debt that is to be split 50/50 when you separate.

          Same with assets - if the house is in your name only, if a bank account is in your name only - it ALL gets split 50/50.

          Taxes incurred during the marriage are not different, they are required to be split 50/50 - not according to CRA, but according to family law, and also according to what is fair - the money that the tax was charged on was spent by both of you, so why would only 1 be repsonsible for the tax bill?

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          • #6
            Hmmm...interesting because this may have changed but when I went through my divorce...anything that was in my name only landed on my side of the equalization and vice versa...I would double check that advice above...only the joint debt were split equally...and we were together over 15 years.

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            • #7
              Originally posted by nikitaforce View Post
              Hmmm...interesting because this may have changed but when I went through my divorce...anything that was in my name only landed on my side of the equalization and vice versa...I would double check that advice above...only the joint debt were split equally...and we were together over 15 years.
              Yes, but what you are saying here (I believe) means that you kept the debt in your name (which may include a tax debt), but in the end everything was EQUALIZED - a payment from one to the other such that you both have the same net worth, thus all debts, regardless of whose name was on it, is shared equally. The debts in your name stay there and it is up to you to deal with them AFTER things have been equalized - that is the point of equalization. If a debt in your name only didn't factor in to equalization, you wouldn't list it!

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