Insights

How does Ningbo's marital debt be identified? Is it common for one party to raise debt?

Ningbo Author：LuXu WANG

"Why should I repay the debt he carried" -- this is the most frequent question in marriage and family counseling. The law does not provide a simple yes-or-no answer; rather, it establishes a criterion that distinguishes based on the purpose of the debt and the expression of intent. The conclusion first says: whether the marital debt is the joint debt of the husband and wife, the core depends on three things-whether the two parties jointly sign or one party after the ratification and other common meaning. The debts incurred by illegal activities such as gambling and drug abuse are not joint debts; the divorce agreement stipulates that the attribution of the debt is only valid within the husband and wife and cannot be used against creditors. This article disassembles this line of judgment.

Three ways to identify 1. common debt: dismantling the elements of article 1064 of the Civil Code

Article 1064 of the Civil Code stipulates: "The debts borne by the joint signature of both husband and wife or the mutual intention of one of the husband and wife, as well as the debts borne by one of the husband and wife for the daily needs of the family in his own name during the existence of the marriage relationship, belong to the joint debts of husband and wife. 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."

Accordingly, there are only three possible pathways for the establishment of joint debt; let us examine them one by one:

  1. The common meaning indicates the path: both parties sign on the debit note and loan contract together, or one party will ratify it through repayment, commitment, WeChat reply "will repay" and other ways afterwards. As long as a joint intention exists, the debt shall be considered a joint debt regardless of the actual use of the funds.
  2. Path for determining needs of daily family life: If one spouse incurs debt in their own name to meet the ordinary living expenses of the family (such as daily consumption, utility and property management fees, children’s education, and basic medical care), such debt shall, in principle, be presumed to be joint debt, regardless of whether the other spouse was aware of it or signed the relevant documents.
  3. The path beyond the daily needs and needs to be proved by creditors: If the large amount of loans, operating liabilities and so on exceed the daily needs of the family, the law shall first presume the personal debt of the borrower; if the creditor claims the common debt, the proof must be used for the couple's common life, joint production and operation or based on the common intention, if the proof cannot be given, the borrower shall bear the personal responsibility.

The weight of 2. common meaning: the effect of signature and ratification

As long as the spouse signs on the debit note, or replies afterwards that "we will repay" and "the money has been received", the common meaning will be established, and the nature of the debt will no longer be in suspense. The "ratification" trigger points that are easily overlooked in practice include:

  1. Acting on behalf of the debtor to answer collection calls, stating that the matter will be handled, participating in repayment negotiations, and making repayment commitments;
  2. Signing in the blank spaces of a promissory note or in the guarantor’s section, even if you believe you are merely acting as a “witness”;
  3. Receiving a loan into one’s own account or a family account and then transferring it to the borrower;
  4. Subsequently confirm the debt in writing or via WeChat and commit to repaying it in installments.

Once such actions have been taken, it is often too late to subsequently claim “lack of knowledge” or “lack of consent.” Conversely, if a spouse has never expressed any intention to jointly assume the debt, a creditor’s claim that the debt is joint solely on the basis of the fact that “they are married” is unlikely to be upheld in cases involving loans exceeding ordinary household needs.

3. the boundaries of the family's daily needs: the amount fluctuates with the family income

"Family needs in daily life" is not a fixed number, but is related to family income level and local living standard:

  1. Scope: expenses for maintaining the normal operation of the family, such as food, clothing, housing and transportation, children's education, medical care, water, electricity and property.
  2. Credit Flexibility: High-income households typically have higher daily borrowing limits than low-income households. For a household with a monthly income of several tens of thousands of yuan, borrowing several tens of thousands to fund their children’s overseas studies or home renovations may still fall within the scope of everyday needs, whereas the same amount of borrowing by an ordinary salaried household might be deemed to exceed its routine requirements.
  3. Limitations of separate property system: Even if the husband and wife implement separate property system (Article 1065 of the Civil Code), the debts for the daily needs of the family still tend to be borne by both parties in practice-the property of common benefit is clear at a glance; but if the husband and wife agree that the property belongs to each other and the creditor knows the agreement, the debtor's personal property shall be paid off.
  4. Judgment materials: the matching degree between the loan amount and the household consumption level, the actual use of the money (flow direction), the background of the family's periodic large expenditure (house purchase and decoration, children going abroad), etc., are all the basis for the court to judge whether they belong to the daily needs.

4. Burden of proof shifted beyond everyday needs: the flow of funds is key evidence.

For large loans, operating liabilities and investment liabilities, the burden of proof is on the creditor's side-the creditor must prove that the money is used for the couple's common life or joint production and operation, otherwise it is presumed to be personal debt. Fund flows are the core evidence:

  1. Money into a separate account of one party for sole proprietorship of one party Debts related to are more likely to be classified as personal debts.
  2. The funds are deposited into the family account and used for shared consumption or joint business operations., the creditor is more likely to prove successful.
  3. One party uses the family account to receive the loan and then transfers it to the spouse to operate., it is easy to be identified as used for living together and operating together, and it is difficult for the spouse to get rid of it.
  4. The evidence adduced by the creditor includes: bank records, chat records, witness testimony, the corresponding relationship between business premises and household expenses, etc.; the electronic evidence should retain the original carrier.

For the spouse, the three points of "not co-signing, not benefiting, and not entering the family" are the main lines of defense. After being sued, they should actively respond to the lawsuit and apply to the court to obtain the fund flow, so as to find out "where did the money go"-empty defense is not as good as running water.

5. types of debt that do not constitute common debt

1. debts incurred by illegal activities such as gambling and drug taking. The debts caused by illegal and criminal activities such as gambling and drug taking are not protected by law, let alone joint debts, and one of the spouses does not need to repay them together; the court does not support the debtor who demands the spouse to share the gambling debts.

2. Net loans that are clearly in excess of daily needs and are not used for living together. If the online loan borrowed by one party in the name of an individual is used for personal consumption, reward, stock trading loss and other purposes unrelated to the family, it is not a common debt; if the creditor cannot prove it is used for common, it shall be repaid by the borrower.

3. Falsified debt. If one party colludes with a third party to forge debts in an attempt to encroach on the spouse's property, according to Article 1092 of the Civil Code, the forgery party may have less or no division in the divorce division; if the forgery of debts is serious, it may also bear legal responsibilities such as obstructing civil litigation.

4. expressly agreed as personal debt and the creditor's knowledge.If a couple agrees during the marriage that all property acquired during the marriage shall be owned separately by each party, and a creditor is aware of this agreement, any debt incurred by one party shall be repaid from that party’s personal assets—note that the burden of proof for the creditor’s knowledge rests with the party asserting it.

Whether the 6. divorce agreement can cut off the debt: the internal agreement does not break the external creditor's rights

If the divorce agreement stipulates that the debt is borne by one party, it is only valid within the husband and wife, and cannot fight against external creditors. Creditors may still claim from both parties and may recover from the other party in accordance with the agreement. This is different from the transfer of property. It is the internal division of debt commitment and has no binding force on the outside world. This is also the fundamental reason why many people mistakenly believe that "if you are divorced, you don't have to pay it back.

Three key points for further discussion:

  1. When creditors sue both parties, the court will examine whether it constitutes a joint debt according to Article 1064 of the Civil Code, and the divorce agreement cannot exempt the spouses from their external responsibilities;
  2. After the actual compensation, the spouse can recover his share from the other party with the divorce agreement and payment certificate;
  3. If a divorce agreement clearly harms the interests of creditors—such as by assigning the majority of assets to one party while placing all debts on the other, who lacks the ability to pay—the creditor may, in accordance with the law, seek to have the agreement set aside or request that the assets be recovered during enforcement proceedings.

Since the internal agreement can not fight against creditors, the debt clause in the divorce agreement should be written as "clear inward" and "leaving a way outward": one is to list the debts one by one-the name of the creditor, the principal of the loan, the interest, the guarantee situation and the agreed undertaking party, so as to avoid using such general expressions as "the debt during the marriage shall be borne by the X party" to bury disputes; the second is to clarify the right of recovery-state that one party has the right to recover the full amount from the other party after compensation and the scope of recovery, as the basis for future prosecution; The third is to keep the certificate-debt certificate, repayment flow and the original divorce agreement, which can be sued for recovery based on the agreement and payment certificate after compensation. The fourth is related to the "transfer" of external debts, the consent of the creditor must be obtained in order to produce the external effect of the debt transfer (article 551 of the Civil Code), otherwise the creditor will still claim to both parties according to the original debt relationship. Such treatment can not only be based on evidence when recovering from the other party after divorce, but also take the initiative when negotiating with creditors (e. g. installment, reduction).

7. deduction case (example, fiction)

Example 1: Large loans are not used jointly, and spouses are not responsible. The man borrowed 800000 yuan from his friend in his own name for his sole proprietorship. The woman did not sign or know about it. The money entered the man's personal account and transferred to the company, resulting in a loss of the company. The creditor sued the husband and wife, and the court required the creditor to prove that the loan was used for the husband and wife to live together or jointly produce and operate.

Example 2: The divorce agreement stipulates that the debt belongs to the man, and the creditor still sues both parties. The divorce agreement between the two parties stipulates that the debt during the marriage belongs to the man and the woman is not responsible. The creditor still sued the two parties for joint repayment, and the court found that the internal agreement could not be opposed to the external creditor, and at the same time, after reviewing the purpose of the loan, it was determined that it constituted a joint debt, and the woman assumed it and recovered it from the man in accordance with the divorce agreement and transfer voucher.

Example 3: Gambling debt is not shared. The man was in debt for gambling, and the creditor sued the woman for joint repayment, and the court found that the gambling debt was not protected by law and was not a joint debt, and the woman was not required to repay it.

8. common mistakes

Misunderstanding 1: If my spouse doesn't sign it, I won't have to pay it back.Correct answer: Not necessarily. Debts that are part of the daily needs of the family are usually still to be borne jointly; joint signatures or subsequent recognition are not exempted from joint liability under the separate property system; only if they exceed the daily needs and are not used for common living or business, and the creditors cannot prove them, they are paid off by the individual party to the liability.

Misunderstanding 2: The divorce agreement states that the debt belongs to the other party. Can the creditor still find me? Positive: Yes. The internal agreement is only valid between husband and wife and cannot be used against external creditors. After you bear, you can recover from the other party by divorce agreement.

Misunderstanding 3: Receiving the collection call on behalf of others and helping to return the first issue will be fine. Positive explanation: Receiving collection on behalf of others, issuing repayment plan, participating in repayment negotiation or signing on the IOU at will may be regarded as ratification afterwards, which directly triggers the common debt and is difficult to overturn in the future.

Misunderstanding 4: If the other party secretly borrows online loans to gamble, I will also repay them. Positive: No. Debts incurred from illegal activities such as gambling are not protected; online loans that clearly exceed the family’s needs and were not used for shared living expenses do not constitute marital joint debt. Be cautious about repaying debts on behalf of others, as doing so may be interpreted as an indication of joint liability.

9. Frequently Asked Questions

Do I have to repay the loan that my spouse did not sign?

Not necessarily. Debts that are part of the daily needs of the family are usually still to be borne jointly; joint signatures or subsequent recognition are not exempted from joint liability under the separate property system; only if they exceed the daily needs and are not used for common living or business, and the creditors cannot prove them, they are paid off by the individual party to the liability.

How to avoid being identified as post-mortem ratification?

Avoid receiving collections, issuing repayment plans, participating in repayment negotiations or signing IOUs at will. Once the intention of sharing is made, it is difficult to overturn it. After receiving the collection information, you can clearly reply "this debt has nothing to do with me, please do not contact again" and keep a record of the reply.

What should I do if the other party transfers the loan to my account?

First, verify whether the funds were used for household purposes. If the money is transferred without authorization by the other party and then transferred out for its personal business, the complete transfer flow should be kept, indicating that the family has not benefited, and if the money is used for family expenses, it may be considered a joint debt. After being sued, you should actively respond to the lawsuit and apply to the court to obtain complete running water and restore the full picture of the funds.

What should I do if the creditor sues me after the divorce if the money borrowed in marriage is not dealt with during the divorce?

The court still examines the nature of the debt in accordance with Article 1064 of the Civil Code, regardless of whether it is divorced. You should organize a defense around "not co-signed, not used for common life and operation" and apply for the transfer of funds flow.

10. Lawyer's Practical Insights

If your spouse has incurred debt while you’re married, whether you have to repay it together cannot be decided solely by whether or not you signed the agreement. The determination of a common debt usually looks at three paths: whether there is a common meaning such as a joint signature by both parties or a subsequent ratification by one party; whether the debt is used for the daily needs of the family; and if it exceeds the daily needs, whether the creditor can prove that it is used for the couple's common life or joint production and operation.Debt for illegal activities such as gambling and drug abuse is not a joint debt. First put these three articles out, and then compare their own situation one by one, the judgment has a basis, and it is not easy to be biased by the other party's statement.

The key point of evidence is the expression of meaning and the flow of funds. Signing or later ratification is very important, so don't promise me to return or sign any materials casually. A word of relief may also be regarded as ratification. The boundaries of the family's daily needs fluctuate with the level of income, with creditors bearing the burden of proof for the excess, and whether the funds flow into the family and are used for common expenses is the key to whether the spouse can be implicated. The accused party should take the initiative to provide evidence that it has nothing to do with the loan and has not benefited from it, rather than passively waiting for the other party to give evidence.

The easiest pit to step on is to use the divorce agreement as a shield. The agreement between husband and wife that the debt belongs to the other party is only valid within you and is not binding on the creditor, and the creditor can still claim to the responsible party in accordance with the law, and then recover it internally. Therefore, prevention should be placed before the formation of debt: do not sign or ratify the debt of the other party at will, large loans try to leave traces of use and account, outside the family business, investment liabilities and personal consumption separate management. Wait until the prosecution or execution to look back for evidence, the initiative is often no longer in their own hands.

The core of marital debt determination is to distinguish who, why and where the money is used. The debts within the scope of daily family agents are difficult to escape, while large and out-of-family debts shift the burden of proof to creditors. For one spouse, it is more effective to hold the boundaries of the account and control the impulse to ratify than to argue after the fact. If you are in debt, don't avoid it passively-actively respond to lawsuits, withdraw water, and advocate defenses in order to keep out debts that don't belong to you.