Liability for a Husband’s or Wife’s Debts – When Are Spouses Mutually Liable for Each Other’s Obligations?

Table of Contents:

Community property and separation of property, joint property and separate property – key concepts in the context of liability for debts
What does liability for debts look like under a separation of property regime?
Liability for a husband’s or wife’s debts incurred in connection with satisfying the needs of the family
Liability for debts incurred before the establishment of a separation of property
Liability for a spouse’s debts under the community property regime
Who is liable for debts incurred without the other spouse’s consent?
Will a prenuptial (marital property) agreement protect you from liability for the other spouse’s obligations?

Marriage is not only about sharing one’s life, but also about making joint financial decisions and bearing the responsibility that follows. What happens, however, when a debt is not incurred jointly, but only by one spouse? And what significance does it have if this was done without the knowledge of the other spouse? Liability for a spouse’s debts is a more complex issue than it may initially seem. How does it work in practice? We explain this in the article below.

Community property and separation of property, joint property and separate property – key concepts in the context of liability for debts

Liability for a spouse’s debts varies depending on the applicable marital property regime. The default regime is the statutory community property regime. It applies from the moment of marriage, unless the spouses conclude a specific marital property agreement introducing a separation of property. If you choose:

• The separation of property regime – marriage does not change your property situation. The same rules apply as before. Each spouse has their own separate property and may freely manage it. Each spouse is also solely liable for their own debts. This is the general rule, although there is an exception, which will be discussed later in this article.
• The statutory community property regime – this leads to the creation of a third property mass: joint marital property. As a result, each spouse still retains their own separate property, consisting primarily of assets acquired before marriage and certain assets acquired during the marriage (e.g. inherited property). However, most assets accumulated after marriage constitute joint property. This primarily includes remuneration for work or income from business activity, regardless of any disparity between the spouses’ earnings.

The community property regime is the default regime. This means that if no special agreement (commonly referred to as a prenuptial agreement) has been concluded, the community property regime will apply.

Spouses may, however, modify their property regime during the marriage. Moreover, in certain circumstances, a court may order a separation of property. Community property also terminates in specific situations, such as upon divorce or legal separation.

What does liability for debts look like under a separation of property regime?

Under a separation of property regime, the matter is relatively straightforward. Since each spouse has only their own separate property, which they may manage at their discretion, each spouse is independently liable for their own debts.

For this reason, separation of property is often chosen by couples where one spouse conducts a sole proprietorship or other business activity. This arrangement allows for limiting financial risk associated with running a business. In such a case, the entrepreneur spouse is liable only with their separate property and not with any joint property.

However, a separation of property does not protect the other spouse from a specific category of debts incurred by one spouse—namely, debts related to satisfying the needs of the family.

Liability for a husband’s or wife’s debts incurred in connection with satisfying the needs of the family

The provisions of the Family and Guardianship Code establish joint and several liability of spouses for obligations arising from the satisfaction of the ordinary needs of the family. Such needs include, among others, housing maintenance costs, the purchase of food, or the purchase of clothing.

Joint and several liability for debts incurred for these purposes applies regardless of the marital property regime. It therefore also applies under a separation of property regime. Although there is a provision allowing a court to decide that only the spouse who incurred the obligation is liable, this may occur only upon application and only for important reasons. Consequently, this constitutes an exception to the general rule. As a rule, even under a separation of property regime, spouses are jointly and severally liable for such debts.

What does this mean in practice? Joint and several liability allows the creditor to seek repayment from one spouse or from both spouses jointly. For example, if a loan company grants a loan to your spouse and the funds are used to pay household bills, the lender may choose to:

• demand repayment of the full amount from your spouse;
• demand repayment of the full amount from you;
• or seek repayment from both of you.

As you can see, in the case of this type of debt, you may be liable for repayment even if you did not personally incur the obligation.

Liability for debts incurred before the establishment of a separation of property

As noted above, a separation of property may also be introduced during the marriage. However, entering into a prenuptial agreement does not affect debts incurred before the separation of property was established. Such debts remain subject to the rules applicable to spouses under the community property regime. Otherwise, spouses could enter into such agreements to limit their liability and thereby act to the detriment of creditors.

Liability for a spouse’s debts under the community property regime

The situation is different under the community property regime. In this case, the indebted spouse is primarily liable for repayment from their separate property. However, this liability may also extend to the spouses’ joint property. In this context, the key issue is whether the other spouse consented to incurring the obligation.

Who is liable for debts incurred without the other spouse’s consent?

In many marriages, even significant obligations are incurred without the knowledge of the husband or wife. This issue is also regulated by law. If only one spouse incurs a debt, liability largely depends on whether the other spouse gave consent:

• If consent was given – the creditor may also seek repayment from the joint marital property. However, even if you consented to incurring the debt, you will not be personally liable with your separate property.
• If consent was not given – the debt may be satisfied from the debtor spouse’s separate property, from their remuneration, from funds obtained in connection with intellectual property rights (e.g. remuneration for granting a licence), and, if the debt arose in connection with the operation of a business, also from the assets forming part of that business.

 

Will a prenuptial agreement protect you from liability for the other spouse’s obligations?

It may appear that the best way to avoid liability for obligations incurred by one spouse is to conclude a prenuptial agreement. Without joint marital property, there seems to be no risk that enforcement proceedings will cover a significant part of your shared assets.

However, one important issue must be borne in mind. Such a marital property agreement is effective only if, before the obligation arises—that is, before the relevant legal act is performed—the creditor has been informed of the existence of the prenuptial agreement. Otherwise, it will have no effect with respect to that creditor. This means that the creditor may still seek satisfaction from the joint property.

It is therefore worth carefully considering the choice of marital property regime not only before marriage, but also during its course—especially if your financial or professional circumstances change.

Remember that liability for a spouse’s debts is a serious matter and may have long-term consequences for the entire family. If you have any doubts in this regard, it is best to consult a lawyer specializing in family law. This will allow you to understand precisely the extent of your liability and determine which solution is most appropriate in your particular situation, enabling you to shape your shared financial future consciously and safely.