Matrimonial Debt

A debt contracted during a marriage and for which both spouses are equally liable, regardless of who contracted the debt or who is directly liable for it.

Family law generally allows for a presumption of joint ownership of assets bought by either spouse during the marriage such that, upon divorce or separation, those assets may be divided equally.

Matrimonial assets are adjusted by the value of similar debts – any debt contracted for a family purpose.

For example, the equity of a matrimonial asset, such as a family house, can only be divided taking into account the matrimonial debt associated with it: the mortgage or any line of credit secured against the house.

In Solomon, a judge of the Nova Scotia Court of Appeal, albeit in a dissenting opinion, wisely stated that:

“I am in favour of the so-called ‘balance sheet’ approach in that matrimonial assets cannot be divided realistically without considering liabilities and debts.

“Just what are so-called matrimonial debts cannot and should not be defined with precision.

“There is no definition of matrimonial debts in the Act.

“The cases have not provided a definition.

“Clearly, debts secured against matrimonial assets in the absence of evidence to the contrary should be deducted in arriving at a valuation of matrimonial assets for the purpose of division between the spouses. As the Act states, it depends on the ‘circumstances in which the debts were incurred’ how the debts should be treated.

“Clearly, there will be many cases in which a debt burden of one of the spouses must be considered in the interest of fairness. However, every debt incurred by a spouse during marriage is not a so-called matrimonial debt. There will be cases when the debts are insignificant, in which case it would be appropriate to disregard the debts on the division of assets. There will be cases in which the breadwinner has incurred significant debts because he was a spendthrift or unwise; in such cases the spouse should not have to share the burden of his improvidence.”