How does the debt get split up when a country breaks up?

If, for example, Quebec were to separate from Canada, Quebec would probaly argue that it has no obligation to repay the debts to the Canadian government? It's hard to imagine how they could be forced to accept those debts as their own.

Now, if we imagine that all of Canada were to separate into smaller entities such that there was no clear 'Canada' remaining, what would happen to the debt?

Note that this question isn't about Canada in particular, it's about what would happen, in these cases, in general.

In particular, I'm looking for answers that explain what would happen if none of the states resulting from the separation resembled the original state that took on the debt. Clearly, none of them would have reason to accept the debt. But none would be more liable than the others.

  • @RickSmith my question also asks what would happen if a country were to break up such that it wouldn't be clear how you could say that any one of the resulting entities is the original entity that took out the debt.
    – Hal
    Commented Dec 30, 2023 at 0:16
  • Irrelevant, it still comes down to negotiating an agreement between successor states and creditors.
    – Rick Smith
    Commented Dec 30, 2023 at 0:54
  • @RickSmith that's your take, but the point remains that it's a different question for the audience. (Aside: the answer you linked presumes that the main state would inherit the entire debt if the negotiation were unsuccessful. So it's not clear from the answer what would happen if there were no 'main' state remaining.)
    – Hal
    Commented Dec 30, 2023 at 1:02
  • The creditors would still be demanding repayment from someone and the new states would have very bad credit if they refused to pay.
    – Joe W
    Commented Dec 30, 2023 at 1:46
  • 1
    I would have thought the critical question here would concern what currency the individual entities intended to make legal tender in their jurisdictions. And most importantly of all, if there was no clear plan for who was responsible for the debt, what would happen to the international value of that currency? If the Canadian dollar became worthless, how would any trade be conducted with the rest of the world?
    – WS2
    Commented Dec 30, 2023 at 10:02


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