Separation and divorce
Joint lines of credit: What are your rights if you break up?
It’s common for couples to take out a joint line of credit, for example to finance renovations, carry out special projects, or cover unexpected expenses. But what happens when couples separate? Here are the rules that apply if you break up and the steps you can take to protect yourself and terminate your obligations.
Who is liable for the line of credit balance if you break up?
When two people take out a joint line of credit with a financial institution, they’re both liable for the money borrowed, even if one of them uses the joint line of credit to buy personal items. This means that you’ll still be responsible for the debts incurred by your ex on your joint line of credit after the separation.
How to avoid being liable for your ex’s future use of the joint line of credit
Once you’ve separated, you can send a notification to your financial institution informing them that you’ll no longer be using the credit extended and that you no longer wish to be solidarily liable for your ex’s future use of the line of credit. You must also inform your ex by registered mail or email, and provide proof of this notification to your financial institution.
From that point on, your ex alone will be liable for any new loans borrowed on the line of credit, but you’ll both remain liable for any outstanding loans from before that point. Any future payments you make to the financial institution will be used only to repay debts incurred before you sent the notification.
To terminate your obligations to the financial institution, you can also cancel your line of credit.
How to cancel your line of credit
Ceasing your use of the line of credit doesn’t terminate the contract binding you to the financial institution, even if the balance is $0. To cancel it, you must contact your financial institution and repay your debt in full. Depending on your financial institution, you can cancel your contract online, over the phone, or in person at a branch.
How to claim amounts you’ve paid on your ex’s behalf
If your ex has withdrawn money from the line of credit for personal expenses or stops making the required payments, you can apply to the court to claim the money you had to pay the financial institution on your ex’s behalf.
If you’re married, you can add this claim to your application for divorce.
If you’re de facto partners, you can claim it in an application at the same time as your other claims concerning your separation. If it’s your only claim, you need to prepare an “Originating Application” to file at the courthouse. The court you need to apply to depends on the amount claimed.
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Warning
The information presented on this page is not a legal opinion or legal advice. This page explains in a general way the law that applies in Quebec. To obtain a legal opinion or legal advice on your personal situation, consult a legal professional.
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