Ningbo Supreme People's Court: How to determine the nature of the debt incurred by one of the spouses in the name of the individual during the marriage relationship.

Does the money borrowed by one of the spouses in their own name during the marriage count as a joint debt in the event of divorce or creditor prosecution? The conclusion starts with: the current rules are clear-article 1064 of the Civil Code shall prevail: debts signed jointly by both husband and wife or recognized afterwards, debts borne by one party for the daily needs of the family are common debts; large debts borne by one party in his own name that exceed the daily needs of the family are not common debts in principle, unless the creditor can prove that the debt is used for the joint life of the husband and wife, joint production and operation or based on the joint intention of the husband and wife. The following reply from the People's Court of the Supreme People's Court in 2014 is the key document to understand the evolution of this rule, and its "internal and external differences" thinking is still of reference value.

Original text of the 1.'s reply (First Civil Trial Division of the Supreme People's Court, July 12, 2014)

jiangsu Higher People's Court: Your Court (2014) Su Minhe Zi No. 2 "Request for Instructions on How to Determine the Nature of Debts Involved by One Husband and Wife in His Personal Name during the Duration of Marriage" has been received. After study, I agree with the tendentious opinion of the judicial committee of your court. In divorce cases that do not involve others, the spouse who has borrowed in his or her own name is responsible for proving that the borrowed debt is used for the couple's living together, and if there is insufficient evidence, the spouse is not liable for repayment. In a debt dispute in which the creditor sues with one of the spouses as the defendant, whether the debt involved in the case belongs to the joint debt of the husband and wife shall be determined in accordance with Article 24 of the (II) of the Supreme People's Court on the Interpretation of Several Issues Concerning the Application of the the People's Republic of China Marriage Law. The debtor's spouse is not liable for repayment if he or she proves that the debt was not borrowed for the life of the couple.

The First Civil Trial Division of the Supreme People's Court July 12, 2014

historical Coordinates of 2. Responses: From "Article 24 Presumption" to Rule Reconstruction

to read this reply, one must return to the legal environment in which it was introduced. Article 24 of the 2003 Interpretation (II) of the Marriage Law stipulates that during the existence of the marriage relationship, the debts incurred by one of the spouses in his own name shall be treated as the joint debts of the husband and wife, unless the spouse of the borrower can prove that the creditor and the debtor have clearly agreed that it is a personal debt, Or prove that it belongs to the separate property system stipulated in the third paragraph of Article 19 of the Marriage Law. This "presumption rule", which is based on the protection of creditors, has evolved in practice a large number of cases of "being indebted"-borrowing by spouses without their knowledge, and even malicious collusion of debts other than gambling debts, have been sentenced to be repaid jointly by the husband and wife, sparking ongoing controversy.

The 2014 reply reflects the fine-tuning of the Supreme Court in the dispute: distinguishing between the two scenarios of "divorce cases that do not involve others" and "debt disputes sued by creditors" and placing the responsibility of "proving that debts are used for husband and wife living together" on the borrower and the borrower's spouse respectively, actually shaking the ice of "one size fits all presumption. Since then, the rules have continued to evolve: in 2017, the Supreme Court issued supplementary regulations to clarify that debts incurred by illegal and criminal activities such as fictitious debts, gambling and drug abuse are not protected by law; In 2018, the Interpretation of the Supreme People's Court on Issues Related to the Application of Laws in Hearing Cases Involving Husband and Wife Debt Disputes formally established the rules of "co-signing and co-signing" and the burden of proof. Article 1064 of proof in 2021. Today's judgment is based on the Civil Code, but the line of thought in the reply "who advocates for living together and who gives evidence" is the same.

3. current rules: Article 1,064 of the Civil Code is dismantled sentence by sentence.

Article 1064 of the Civil Code is divided into two paragraphs:

the first paragraph stipulates that the debt of the husband and wife, such as the joint signature of the husband and wife or the subsequent ratification of the husband and wife, shall be the joint debt of the husband and wife. This is the principle of "co-debt co-signing"-signature, fingerprint, WeChat confirmation, after-the-fact repayment statement and other common meaning, are the common debt of the final evidence.

The second paragraph stipulates that the debts incurred by one spouse in the name of the individual for the daily needs of the family during the existence of the marriage relationship are joint debts of the husband and wife; the debts incurred by one spouse in the name of the individual during the existence of the marriage relationship that exceed the daily needs of the family are not joint debts of the husband and wife, except where the creditor can prove that the debt is used for the joint life, joint production and operation of the husband and wife. This paragraph contains two presumptions: first, small loans within the scope of "family daily needs" are presumed to be used for the family and are presumed to be joint debts; Second, large loans with an amount obviously exceeding daily needs are presumed not to be joint debts, and the burden of proof is transferred to the creditor-the creditor must prove that the money is indeed used for joint life or joint operation, or that the husband and wife have expressed common intention.

4. burden of proof: there is a difference between inside and outside, who advocates who gives evidence

combing the current rules of proof, it can be divided into three categories of subjects and three situations:

1. internal handling of divorce cases (debtor's spouse claims no responsibility): Consistent with the first line of thought in the reply-the borrower must prove that the loan is used for the husband and wife to live together. If it cannot be proved, the spouse shall not bear the responsibility for repayment.
2. External litigation sued by creditors (creditors claiming joint debt): The creditor shall prove that the loan "beyond the daily needs of the family" is used for common life, joint production and operation or common intention, and the spouse can shake the creditor's claim by putting forward the counter-evidence that "no joint signature, no ratification, and the money has not been used for the family.
3. Judgment of the Range of Family Daily Life Needs: There is no national uniform amount line, the court generally combined with the local consumption level, household income, borrowing purposes (daily shopping, medical care, education, water and electricity property, etc.) comprehensive determination, large investment, gambling expenditure is obviously beyond the daily range.

For the spouse who is "indebted", three types of evidence are focused on: proof that there is no signature on the loan contract and that I have never ratified it. For the creditor party, the loan should be fixed use evidence: transfer notes to state the purpose, keep chat records to prove the borrower's claimed purpose, as far as possible to require the husband and wife to sign together.

How to identify common 5. scenarios: case breakdown

1. the loan is used for house purchase, decoration, children's education and family medical treatment.: Although signed by one party, the money is actually used for the family and is recognized as a joint debt.
2. One party's business borrowing: if the operating income is used for the common life of the family, it is a joint debt of "for joint production and operation.
3. Large debts incurred by one party during separation: it is generally difficult to identify them as being used for living together unless the creditor can prove the actual use; spouses are more likely to be exempted from liability for debts incurred during separation due to emotional discord.
4. Illegal debts such as gambling, drug abuse, etc.: not protected by law, not borne by the spouse.
5. Falsification of debt: If one party colludes with an outsider in an attempt to occupy more property, the spouse may claim that the "debt" is not established, and in accordance with Article 1092 of the Civil Code, the party who forges the joint debt may be divided or divided in divorce.

6. settlement, recovery and special scenarios: the landing of common debt.

The identification of common debt is only the first step, and there are several practical issues in the liquidation and recovery process:

1. order of settlement: The joint debts of the husband and wife shall be paid off with the joint property of the husband and wife; if the joint property is insufficient to pay off or the property is agreed to belong to each other, the two parties shall agree to pay off, and the court shall decide if the agreement fails. Externally, creditors may claim all claims from either spouse, and how they are shared internally does not affect the rights of creditors.
2. Recovery after one party pays more: If one of the spouses assumes the responsibility for the settlement of the joint debt beyond its share, it may recover from the other party in accordance with the divorce agreement, court judgment or internal agreement.
3. Guaranteed debt is generally not a joint debt.: If one party provides a guarantee or mortgage guarantee for another person's loan, if the secured debt is not used for the husband and wife to live together, it is generally not recognized as the joint debt of the husband and wife.
4. Treatment after the death of one of the spouses: after the death of one of the spouses, whether the spouse is responsible for the debt in the name of the deceased is still based on whether the debt is the joint debt of the husband and wife.
5. Spouse's rights and interests in execution: When a creditor applies for execution on the basis of an effective judgment in which only one party is executed, the property in the name of the spouse is executed, and the execution objection may be filed in accordance with the law, claiming that the debt is not a joint debt or its share should be protected, but must bear the corresponding burden of proof.

7. two-way advice to "indebted" spouses and creditors

standing on the spouse's side: pay attention to the trend of large family debts during marriage, and maintain written objection to large loans that are not signed by oneself; Once sued, organize a defense around the four points of "no signature, no ratification, no money entering the family, and exceed daily needs", and apply to the court to investigate the flow of loan funds-if the money directly enters the other party's personal account and is used for personal consumption or operation, the determination of common debt lacks foundation. On the creditor's side: don't be superstitious about "borrowing in marriage is the joint debt of husband and wife", the burden of proof of creditors in the civil code era is heavier. Both sides have made the "use evidence" solid, and disputes have naturally decreased.

8. FAQ

I have no idea about the usury my husband borrowed privately. Do you want to pay it back together?

Look at the use. If it exceeds the daily needs of the family and is not used for living together, it is not a joint debt in principle and the creditor must prove its purpose; debts used for illegal activities such as gambling are not protected and do not need to be repaid by the spouse.

The debit note is signed by only one party, but the money is used to buy a house, is it a common debt?

Calculate. The criterion is not the number of signatories but the use of funds-the loan is actually used to purchase the joint property of the husband and wife and other common living needs, even if only one party signs, it is also a joint debt of the husband and wife.

The divorce agreement stipulates that "all debts belong to the man". Can the creditor still find me?

Can. The debt arrangement in the divorce agreement is only valid within the husband and wife and cannot be used against unwitting bona fide creditors.

Is the money owed by the other party during the separation irrelevant to me?

In principle, it is irrelevant unless the creditor can prove that the money was used for the husband and wife to live together or jointly produce and operate. Large loans during separation are more difficult to prove and the likelihood of spouse exemption is high.

If the loan is used for gambling, does the spouse have to pay it back?

No need. Gambling is an illegal activity and gambling debts are not protected by law; if the lender knowingly lends the loan for gambling, the loan relationship is invalid and the spouse is not liable for repayment. Such debts can also be a disadvantage to the borrower in the event of a divorce split.