My wife of three years and I have separated within the past…

There is a house originally owned by me but now in joint tenancy. When we got married she agreed to buy half equity in my house to which she moved in as well as agreeing to split expenses (oral agreement). She put $8500 down and took out a mortgage for 77000 . She has reduced her principal to 71,700 as of Dec 1. I am assuming all payments since she moved out. I have a $50 000 line of credit secured against the house for my half. The poperty will most likely be sold (net $200 000) or I must buy her out. There is a leased furnace ($11700 buyout) that I had installed year before we got married. Is that my responsibility to pay off or joint responsibility because it is part of the matrimonial house ? If we sold the house for $200 000 would the total debt (121 700) be combined and the residual (78 300 split evenly or does she get the difference between the half to which she agreed (100 000 and the 71,700) and I get the difference between my half ,to which I agreed, and the 50 000 PLC ?

We did not live together first other than a few weeks before the wedding since she sold her house. With the proceeds she did pay her debts off, car loan, gave some to her children, lent some to a friend, and may probably used some of the money for living expenses since her salary was musch less than mine. She did cash in some RRSP's during our marriage to pay expenses, debts, etc. but none of it went directly to the house i.e. furniture, improvements, etc. She did not put a lot of money into the house other than her share of the expenses to which she agreed. After about 16 months, I started to contribute double the contributions for routine expenses but she still had the mortgage payment and I still had my PLC deductions as well as my other debts (credit card, furnace payment ($200/mo), car expenses, etc.) She is obviously remorseful that she has spent the money from her house and cashed in some RRSP's and will probably want that money back that she spent ! The year before we got married I spent about $40 000 on upgrading the house(new flooring, furnace, new windows, new carpeting, painting & decorating, patio, hot tub, etc. of which some of these she wanted. Hope this fills in a few gaps.

Thanks in advance

JA