Divorce and Your Mortgage: What Separating Couples Need to Know

Thank you, Bruce.

Um, take us through the essence of the process.

So a couple that is married, they got approved together, they provided their joint income statements, they probably provided their credit scores.

They were hoping to live happily ever after in that home.

Now they're in a period in which, um, the marriage is breaking down, they are separating.

They're not yet to the point of selling the house, 'cause that's a, a different thing, but they're in that in-between phase.

What are some things that are relevant for people to understand?

Uh, I think one of the most important things that people have to understand, uh, when they're going through the separation or divorce process is they conflate the idea of their share of equity in the home, I guess the way the, the title of the home is legally registered, with their share of responsibility towards the joint debt.

And those two things couldn't be farther apart from each other just because, and in most cases in Canada, uh, when you're buying a home as, uh, a married couple, the bank will require you to go on title as joint tenants, and joint tenants implies equal ownership, 50/50.

And they'll take that 50/50 ownership theory, and they'll apply it to the responsibility of the liability, in this case, the mortgage, and that's not true.

And that's usually where things start to fall apart.

The bank, the lender, they don't care what your legal ownership is in the property.

You are both 100% responsible for that debt.

And I know that the, the math doesn't math on that.

That's almost like me saying one plus one equals one.

It is true, you're both 100% responsible.

You are jointly and severally responsible for that debt.

So jointly means together, and severally means even independently you are still 100%.

And I think that's where people start to really disconnect and fight on who's responsible for what.