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We're not married. What happens to our property and debts if we separate?

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We're not married. What happens to our property and debts if we separate?

Glossary

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Reviewed: 
July, 2017
Answer

The rules about how you divide your property depend on whether you're married or in a common-law relationship.

Married couples usually share the value of their property if they separate or divorce. This is not true for common-law couples, who have different rights.

Property

Usually, each common-law partner keeps:

  • the property they had when they started the relationship
  • the property they got while they were living with their partner

They only have to share the property they own together.

For example, say when you separate from your partner you have $1,000 in your bank account and $4,000 in a joint bank account with your partner. You keep all of the $1,000 in your bank account and half of the money, or $2,000, in the joint bank account.

Some property isn't easy to divide so you share the value of the property instead of the property itself. For example, say you have a jointly owned car. You can buy the car from your partner by paying them the value of half the car. Or you can sell the car and split the money.

Exceptions

But you can make a claim to your partner's property in some situations.

The most common example is by proving an "unjust enrichment". This means that it would be unfair to allow your partner to leave the relationship without sharing their property.

To make this claim, you have to show that:

  • you contributed to the property,
  • your partner benefited from your contribution, and
  • there is no reason for your partner to keep this benefit.

Another claim a common-law partner can make is that their partner is holding property through a "resulting trust". This means that the property is in your partner's name but is really your property.

Claims based on unjust enrichment and resulting trust can be very hard to prove.

Debts

Usually, you are responsible for repaying your debts, and your partner is responsible for theirs, unless you have an agreement saying who is responsible for which debts.

You're both responsible for repaying a debt if you signed a loan agreement together. This is true for any two people who sign a loan together, whether or not they're married. Even if you didn't benefit from the loan, you might have to repay it, if your partner doesn't pay.

Making an agreement

You and your partner can make a separation agreement that says what happens to your property after you separate.

Some people divide property by applying the rules of a cohabitation agreement that was signed before they separated.

Time limit

If you and your partner can't agree, you can ask the court to make an order to divide your property.

The usual time limit to make a claim for a share in property that is not real estate, such as for a share in your common-law partner's business or car, is 2 years after separation.

The usual time limit to make a claim for a share in real estate property, such as for a share in a house or farm property, is 10 years after you separate.

Sometimes a court extends the time you have to make a claim.

Choose the right court

There are 3 courts that deal with family law issues in Ontario. These are the:

  • Ontario Court of Justice
  • Superior Court of Justice
  • Family Court branch of the Superior Court of Justice

It is important that you go to the right court. You have to start your case in a court that:

  1. Deals with the family law issues you need to resolve. For example, the Ontario Court of Justice doesn't deal with divorces or dividing property, so you would have to go to either the Superior Court of Justice or Family Court branch of the Superior Court of Justice.
  2. Is in the municipality closest to where you or your partner live. But, if your issues include child support, custody, or access, you should go to the court in the municipality where your child lived before you and your partner separated.

If you're not sure which court to go to, call the family courthouse (link is external) in your municipality to ask.

In some cases where there is no Family Court branch of the Superior Court of Justice, you may have to start your case in Small Claims Court if you are asking for money or property that is worth $25,000 or less.

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