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How to deal with the debts incurred during Ningbo cohabitation

Ningbo Author：LuXu WANG

If a couple lives together without getting married, and one of them takes out a loan during that time, is the other party obligated to repay it? Cohabitation is not governed by marriage law, yet in practice, many couples “spend together” and “borrow together.” As for how to determine whose debt it is, it cannot be entirely attributed to one individual, nor can it automatically be treated as “joint marital debt.” Let’s get the conclusion out of the way first: The cohabiting parties do not register their marriage, do not establish a husband-wife relationship, and do not directly apply the rules of the Civil Code on the joint debt of husband and wife; the debt of one party in his own name can only be borne by both parties if it can be proved to be used for the common life and business of both parties, or if the other party signs together, ratify afterwards and benefit together, otherwise it belongs to the personal debt of the borrower, the other party is not responsible-"who claims the common debt, who bears the burden of proof" is the core of the referee.

1. Legal Basis and Regulatory Framework: Why the "Rules on Marital Joint Debts" Cannot Be Directly Applied

Article 1,064 of the Civil Code provides: “Debts incurred by both spouses through a joint expression of intent, such as when both sign or when one spouse subsequently ratifies the debt, as well as debts incurred by one spouse in their own name during the subsistence of the marriage for the needs of daily family life, shall be regarded as joint debts of the spouses.” Debts incurred by one spouse during the subsistence of the marriage, in that spouse’s own name and exceeding the ordinary needs of daily family life, do not constitute joint debts of the spouses; however, this does not apply if the creditor can prove that the debt was used for the common life of the spouses, for their joint production and business operations, or was incurred pursuant to a joint expression of intent by both spouses. This provision establishes the three criteria for marital debt—joint signing, joint consent, and joint use—but its applicability is premised on the existence of a marital relationship. Article 1,049 requires that both parties intending to marry personally apply for marriage registration at the marriage registration authority; only upon completion of the registration is the marital relationship deemed established. When a couple cohabits without registering their marriage, any property acquired and any debts incurred during that period do not fall under the matrimonial property regime.

There is no specific legislation governing debts incurred during cohabitation; in practice, such matters are governed by the general rules set forth in the General Provisions and Contract sections of the Civil Code: contractual obligations, in principle, are borne by the parties to the contract; where two or more persons jointly incur a debt or jointly benefit therefrom, it is treated as a joint debt. When adjudicating disputes over debts incurred during cohabitation, courts generally refer to the substantive criteria underlying Article 1064—namely, whether there was a joint intention, whether the debt was used for common living expenses, and whether both parties derived a common benefit—in determining liability. Courts do not automatically preclude the possibility of joint liability simply on the basis of differing legal statuses, nor do they equate mere cohabitation with joint debt. Understanding this point is the key to resolving all disputes over debts incurred during cohabitation:The relationship of identity serves as the first filter, while substantive criteria constitute the second measure.

2. Case breakdown: The boundary between joint debt and individual debt

(I) Those signed by both parties or debts incurred jointly by both parties.If a promissory note or loan agreement bears the signatures of both parties, or if one party has issued a joint repayment commitment, this constitutes a joint expression of intent, and both parties are jointly liable to the creditor for repayment—this is the clearest scenario, leaving virtually no room for dispute.

(II) One party incurs debt that is used for the common life of both parties.A loan used for the rent, daily expenses, joint childcare, and the purchase of major household items by both cohabiting parties, although incurred in the name of only one party, is deemed a joint debt during the cohabitation period because the funds actually benefit both parties. A typical example is: one party takes out a loan in their own name to renovate the jointly occupied residence or to finance inventory purchases for a jointly operated small shop.

(III) One party incurs debt that is used for joint business operations. If both parties in the cohabitation jointly invest, jointly operate restaurants, online stores, stalls, etc., and the loan required by the operation is used for joint operation and the income is shared, it is usually regarded as common debt; but if the business entity is only registered in the name of the borrowing party, the other party does not participate in the business decision-making and does not share the income, the tendency to identify personal debt-this is in line with the logic of "joint production and operation" in the joint debt of husband and wife.

(IV) Debt incurred by one party for purely personal purposes.If the loan is used for the borrowing party’s personal consumption (such as gambling, personal extravagance, or to refinance premarital debts or debts owed to a former spouse), or for business activities conducted under the borrowing party’s name that do not benefit the other party, such debt shall be deemed personal and the other party shall bear no liability. The other party need only prove that the funds were not used for shared living expenses, that they were unaware of the transaction, and that they did not benefit from it in order to successfully defend against the claim.

(V) Ratified retroactively. Where one party incurred the debt without the other’s participation, but subsequently confirmed via WeChat that “we will repay this debt together” and voluntarily repaid part of the amount, such conduct constitutes subsequent ratification, thereby transforming the debt into a joint obligation. Ratification requires an explicit expression of intent; silence or passive acceptance generally does not constitute ratification.

3. Allocation of the burden of proof: he who asserts must prove.

The creditor or the party claiming that the debt is a joint obligation must prove that the debt was incurred for the common living expenses or joint business operations of the cohabiting parties, and that the other party also benefited from it; mere assertions such as “we live together” or “we are boyfriend and girlfriend” are insufficient to establish a presumption of joint liability. On the other hand, if the non-borrowing party claims that it is the other party's personal debt, it should prove that the money was not used for living together, that it was not known to itself and that it was not beneficial-in practice, it is usually the proof of "where the money went": the account into which the loan was made, the subsequent consumption record, and the degree of relevance to living together. Ningbo's two-level courts adhere to this standard in debt-related cases: according to the judgments of Cixi Court (2018) Zhejiang 0282 Minchu No. 7747 and Ningbo Intermediate People's Court (2019) Zhejiang 02 Minzong No. 1524, creditors must prove that loans exceeding the daily needs of families are used for common life, common production and operation or there is a common intention, otherwise they will not be recognized as common debts; the burden of proof is allocated by reference to this caliber in a cohabitation debt dispute. It is worth emphasizing that the burden of proof for debts “exceeding ordinary needs” rests with the creditor, while the threshold for recognizing “small, everyday” debts is lower. However, in a cohabitation relationship, there is no statutory authority to act as an agent for routine household matters as exists in marriage; even for small loans, the creditor must specify the purpose of the funds.

4. Scenario Exercise (Example, Fictional)

Example 1: Zhang and Li cohabited for two years. Zhang, in his own name, borrowed RMB 80,000 to cover the renovation costs of the apartment they rented together, and the renovation expenses were used jointly by both parties. After the breakup, the creditor sued both of them. The court held that although the loan was taken out in Zhang’s name alone, the funds were used for home renovations related to the couple’s shared living expenses, and Li had indeed benefited therefrom; accordingly, the court ruled that both parties shall jointly repay the loan. Example 2: During the period when Wang and Zhao were cohabiting, Wang secretly borrowed RMB 50,000 to repay his personal gambling debts, without Zhao’s knowledge. Creditors sued Zhao for joint repayment, Zhao submitted Wang's loan on the same day of transfer to the gambling platform, Zhao's monthly salary flow and living expenses vouchers, proving that the money was not used for common life. The court found that the paragraph is a personal debt of Wang, Zhao is not responsible. Comparing the two cases: the scales of judgment have consistently tipped toward the questions of “where did the money go?” and “who benefited?”

5. Common misconceptions

Misunderstanding 1: "Living together is a family. I have a share/don't have to pay back all the money ta borrows. Correct answer: Cohabitation does not have the legal effect of marriage; liability for debts depends on whether there was a joint intention and mutual benefit—there is neither automatic joint liability nor automatic exemption from liability. Misconception 2: “They borrowed money in both our names, so as long as I don’t sign, I don’t have to repay it.” Correct answer: Even if a party has not signed but subsequently ratifies the obligation, uses the funds in practice, or derives joint benefit from them, the debt may still be deemed a joint liability. Myth 3: “For debts incurred during joint business operations, once I withdraw from the business, it’s no longer my responsibility.” "Positive solution: Debts formed during the joint operation and used for joint operation shall not be forgiven as a matter of course as a result of withdrawal from the operation, and written arrangements shall be made with creditors and the other party on the stock of debt at the time of withdrawal. Myth 4: “When the creditor sues, they sue all of us, so I just have to accept it.” Correct answer: A party that has not incurred debt may actively respond to the lawsuit and provide evidence that the funds were not used for common household expenses; if such evidence is sufficient, the party may be exempt from liability. Conversely, failing to respond to the lawsuit may result in a default judgment being rendered against them. Misconception 5: "If the transfer note says 'loan,' it must be a loan relationship." Correct answer: Financial transactions between cohabiting parties may also be deemed gifts, advances, or joint investments, and should be assessed comprehensively in light of chat records and the context of the transactions. The clearer the written evidence, the fewer the disputes.

6. List of Evidence Materials

  1. Promissory note, loan agreement, and repayment commitment letter (including signatures and dates);
  2. Bank transfer records, WeChat/Alipay transfer vouchers (note the notes and the other party's account information);
  3. Chat logs (details of the loan, purpose explanation, and expression of ratification), retain the original device;
  4. Proof of fund destination (details of where the funds were transferred, transaction records, purchase orders, etc.);
  5. Evidence of cohabitation (shared rental agreement, records of joint expenses, bank statements from a joint account);
  6. Evidence of joint operation (business license, partnership agreement, capital contribution transaction records, dividend payment records);
  7. Evidence of the income and expenditure of the non-borrowing party (proving that the amount is not related to it and has not benefited from it).

7. Key procedural points and legal evolution of dispute resolution

The litigation procedure of the cohabitation debt dispute has three main points: First, jurisdiction-it is under the jurisdiction of the basic people's court of the defendant's domicile or habitual residence. If the creditor sues both cohabitation parties at the same time, he can choose to sue the court of either defendant's domicile (Article 22 of the Civil Procedure Law); Second, limitation-the common limitation of action for the cohabitation debt dispute is three years, calculated from the date when the obligee knew or should have known the damage to the right and the obligor, if the claim is made after many years of separation, first check whether the time limit is exceeded and whether there are any reasons for interruption (collection records, repayment commitments, partial performance); Third, evidence-the court's determination of cohabitation is usually judged comprehensively in combination with the time of common residence, the degree of mixing of living expenses, and evidence of external activities in the name of husband and wife, the longer the cohabitation and the deeper the economic mix, the greater the scope for identifying common debt. In addition, it is necessary to explain the legal evolution: before the implementation of the civil code, the supreme law issued special opinions on "living together in the name of husband and wife without marriage registration" to deal with the problems of property and debts. this batch of judicial interpretations has been abolished with the implementation of the civil code. The current treatment of cohabitation debts has returned to the general rules of the civil code, and will no longer be treated as "de facto marriage" with reference to the substantive standards behind article 1064. This also means that cohabiting partners will not automatically be afforded the protection or subjected to the liabilities under the rules governing marital debt simply by living together for an extended period—whether they bear joint liability ultimately depends on the evidence.

The key points of operation after breaking up or breaking up: ① After the joint debt is paid off, the internal recovery shall be shared according to the proportion of their respective benefits, and the written agreement can be added in addition to the settlement certificate; ② If the creditor sues "two people jointly repay", the non-borrower can also claim the procedural rights such as limitation of action and jurisdictional objection in addition to the substantive defense when responding to the lawsuit; ③ Common property (houses, vehicles, deposits) and common debts during the period of cohabitation should be settled as a whole-only the division of property, regardless of debt, or the recognition of only debt but not property, may be out of balance afterwards. By clearly specifying in a written agreement the respective shares of joint debts and the allocation of jointly owned property, you can avoid disputes years down the line; although such an agreement is not enforceable against creditors, it provides a solid basis for internal recourse among the parties.

8. Frequently Asked Questions

During the cohabitation period, do I have to repay the money my partner borrowed?

Not necessarily. If it is used to live together or operate together, or if you sign together and ratify it afterwards, it may be shared.

Does the "joint debt of husband and wife" apply without a certificate?

Not directly applicable. Article 1064 of the Civil Code is premised on the status of marriage; cohabitation does not give rise to the same legal effect. However, courts will assess such debts by reference to the substantive criteria of “joint intent, shared life, and mutual benefit,” and they are not automatically deemed to be individual debts.

How can it be proven that the debt is the other party’s personal debt?

Keep the evidence of the loan flow (where to transfer and what to use), your income and expenditure vouchers and uninformed chat records to prove that the money has not been used to live together and you have not benefited yourself; After receiving the prosecution materials, actively respond to the lawsuit and put forward personal debt defense in the defense.

If a debt is incurred through cohabitation and joint business operations, are both parties responsible for repaying it?

If it is used for joint operation and mutual benefit, it is generally recognized that the joint debt is jointly borne by both parties; if it is only registered in the name of the borrowing party and the other party does not participate and does not benefit, it tends to be personal debt. It is recommended to keep writing and accounts for both operations and loans.

During cohabitation, a house is purchased with a loan taken out in one party’s name but registered in both parties’ names. After the breakup, who is responsible for repaying the loan?

Externally, the borrower under the loan agreement bears the responsibility for repaying the bank; internally, the parties shall share the repayment obligations in proportion to their respective contributions to the property and their respective co-ownership shares. The houses under the names of the registered parties shall be treated as common, and one party may obtain the house and undertake the debt through negotiation, and the other party shall obtain the discount compensation, but the change of the loan subject shall be subject to the consent of the bank, and the bank shall still claim to the contract counterpart before the change.

Practical experience of 9. lawyers

If a couple lives together without getting married, does the other partner have to repay a debt incurred by one of them? First, it’s important to establish this premise: cohabitation is not marriage, so the rules governing marital joint debts cannot be applied directly. In other words, cohabitation or shared expenses do not, by themselves, establish joint liability for a debt. The key to determining liability is whether the funds were used for the couple’s common living expenses or joint business operations, or whether the other party either signed the agreement jointly, subsequently ratified it, or derived a mutual benefit from it. Clarifying the nature of the issue is the starting point for resolving such disputes; otherwise, if the direction is wrong from the outset, the more effort you put in later, the further off course you will go.

The allocation of the burden of proof is crucial for both parties. If it is claimed that the debt should be borne jointly by both parties, evidence must be presented to demonstrate that the funds were used for common living expenses or business operations, or that the other party expressed a joint intention to incur the debt; otherwise, the debt will be deemed the personal obligation of the party who incurred it. Therefore, the party being pursued for debt does not need to rush to prove its innocence; instead, it should focus on challenging the validity of the opposing party’s evidence—for example, by demonstrating that the funds are unrelated to it, were not used for joint expenses, or that it was never involved in or benefited from them. In turn, creditors have to prove the fact that there is a mutual benefit, and an empty IOU is usually not enough.

In the preparation of evidence, we can start with the traces of living together: common living arrangements, rent, utilities, common operating expenses, and communication records of both parties on loans, all of which can help restore the whereabouts and uses of money. At the same time, it should be noted that the property purchased during cohabitation, the proceeds from joint operations, and the debt are two different things, and it is best to consider them together when dealing with them, so as to avoid focusing on the debt and ignoring the things that can be divided. Procedural, usually based on a lending dispute between the creditor and the actual borrower, the implicated party claims that it is not responsible, and it will be much smoother to sort out the structure and then act.

The judgment logic of cohabitation debt is based on "where the money goes, who means it and who benefits", not a marriage certificate. The order of self-protection is: not to sign the other party's debit note at will, to leave written agreements and accounts for joint business and joint borrowing, and to retain evidence that the other party has not used the money to live together in private. Encountered the creditor's claim, first distinguish between personal debt or common benefit debt, and then decide the defense path: personal debt direct defense, common benefit debt should be measured their respective shares, strive to negotiate a solution with creditors, to avoid debt in the long-term suspension after the break-up, profit expansion.