Before you separate or divorce

What is the difference between separation and divorce?

The laws that apply to financial matters such as property division and spousal support depend on where you live, whether you are married or in a common-law relationship, and if you are married, whether you are separating or getting a divorce. 
  • Separation: when two people who have been living together decide to live separately and are not likely to live together again. For married people, separation doesn’t end the marriage—a divorce is required to do that legally.
  • Divorce: the legal ending of a marriage by a court.
For more information about separation and divorce, consult Justice Canada or your provincial or territorial government.

Getting help from professionals

When you separate or divorce, you will need to decide: who will stay in the home, take care of the children and pay family debts and expenses; how much support will be paid; and how you will divide any property.
 
If you and your former partner need assistance in reaching an agreement on these issues, you can consult a number of resources, including:
If you and your former partner cannot agree on certain issues, you may also go to court and ask a judge to decide. However, the court process takes time and can be very expensive.

Lawyers and notaries  

It’s a good idea for each of you to get advice from a lawyer (or a lawyer or notary if you live in Quebec) who specializes in family law.
 
If you cannot afford a lawyer, you may be eligible for legal aid for advice on certain issues, such as parenting or support payments through your provincial or territorial government.
 
Many provinces and territories also offer lawyer referral services or family law information centres.

Mediators 

If you can’t agree on how to divide your property and other financial matters, another option is to work with a mediator. This is a neutral third party who can assist you in deciding on a mutually agreeable solution. A mediator cannot impose a decision on you, so you and your former partner must be willing to work together.

Arbitrators 

You can also work with an arbitrator. The difference between a mediator and an arbitrator is that an arbitrator’s decision is binding on both of the former spouses or partners.

Financial advice 

While legal advice is often essential, it can also be a good idea to consult a financial planner or advisor, or an accountant. They can help you understand the financial and tax implications related to separation and divorce.

Credit counselling 

The financial aspects of a break-up can often be a significant source of stress. You may find it helpful to contact a credit counselling agency. Some agencies offer support programs that are free of charge. Getting credit counselling by itself (without entering into a debt management program) will not have an effect on your credit report or score.

Take stock of your financial information

When you separate or divorce, it’s a good idea to make a complete list of the property you own jointly or separately, as well as your debts and expenses.
 
You should also write down the names of your financial institutions and account numbers for your chequing and savings accounts, credit cards, loans and investments.
 
Make sure you have copies of important financial information, such as current statements for outstanding loans, recent pay stubs and your tax returns for the past three years.
 
While you are working out your separation or divorce, keep bills and receipts for expenses related to your family. Gathering this information will be helpful later when you are working out how to divide your property if you do not have a prenuptial or cohabitation agreement that predetermines these issues.

Decide on a separation agreement

Often when couples separate, they will decide on a separation agreement. It usually covers details such as living arrangements, how property and debts will be divided, child and spousal support, and parenting arrangements, such as access to and custody of children.
 
Before you sign the agreement, you should speak to a lawyer to make sure you know all of the legal consequences of your decisions. Once the agreement is signed by both of you and a witness, it becomes a legally binding contract that you must honour.

Establish your own accounts and deal with joint accounts

Open your own chequing and savings accounts and establish your own credit, if you haven’t done so already. Update your direct deposit information for paycheques, government cheques and any other regular payments you receive to ensure they are deposited to your own account. 
 
You should decide right away what to do about any joint assets or debts you share with your partner. These might include chequing and savings accounts, credit cards or lines of credit. It’s usually a good idea to get advice from your lawyer on the best way to handle your joint accounts and debts.
 
You can also contact your financial institution for advice on how to protect your interests in your joint accounts, such as preventing further borrowing from a credit account or withdrawals from a joint bank account​.

Know your rights and responsibilities related to joint accounts and loans

If you don’t close your joint accounts and loans, both of you may continue to be legally entitled to the funds in any joint accounts, as well as responsible for repaying any debts, even if your separation agreement states that only one person is responsible.
 
If one borrower doesn’t pay the debt, the lender can demand that any borrower listed in the loan or credit agreement pay the entire amount or continue making regular payments.
 
For certain credit cards, authorized users (also called “secondary cardholders”) can be held responsible for any outstanding balances, even if they did not sign the credit card application. To find out whether you are responsible, read your credit agreement or ask your lender.
 
When you co-sign for a loan, credit card or line of credit from a federally regulated financial institution, each of the joint borrowers has the right to receive the same information from the lender about the loan. For example, if you co-signed for a credit card with your former partner, the lender must give each of you copies of the credit agreement and the monthly statements, unless you consented either verbally or in writing (on paper or electronically) to waive this right.
 
If you have already waived your right to separate disclosure, you can change your consent if you decide you would like to receive information about the joint account or loan.   

Check your credit report

Once you have closed joint accounts or paid off joint loans, check your credit report to make sure your financial information has been updated.
 
Keep in mind that the new information may not appear in your file immediately. Many financial institutions provide information to the credit reporting agencies every 30 days, so check after a couple of months.

Make sure you have a credit history

It’s important to have a credit history if you want to apply for credit or loans, such as credit cards or a mortgage. Some landlords and employers will check your credit history before considering you for an apartment or a job.
 
This can be an issue if most or all of a couple’s accounts and bills were registered and paid under one spouse’s name. As a result, the other spouse may have a low credit score.
 
Now that you’re on your own, it’s important to take steps to build your credit history so that you have more financial options.
 
Table: SharePoint
Table: SharePoint