Ningbo divorce common debt and personal debt who first pay off.

When dividing property, everyone stares at the house and savings, and the real surprise is often the debt. In some cases, a debt is explicitly assigned to one party in the divorce agreement, yet the creditor still sues both parties together; in other cases, even though a debt was ostensibly incurred by only one spouse, the court still rules that both spouses are jointly liable for repayment. The root of the problem lies in the fact that the criteria for recognition, the order of priority in liquidation, and the validity of agreements are three distinct and independent sets of rules. First of all, the conclusion is that the husband and wife shall bear joint and several liability for the common debts, which shall be paid off internally in the common property and then divided. The agreement on debt commitment in the divorce agreement is only valid between husband and wife and cannot be opposed to creditors without the consent of creditors. Personal debts are paid off by the personal property of the borrower, and the other party is not responsible in principle.

Determination of 1. joint debt and individual debt: three channels of Article 1064 of the Civil Code

Article 1064 of the the People's Republic of China Civil Code stipulates that the debt of the joint signature of the husband and wife or the joint intention of the husband and wife, as well as the debt of the husband and wife for the daily needs of the family in the name of the individual during the existence of the marriage relationship, belongs to the joint debt of the husband and wife; the debt of the husband and wife during the existence of the marriage relationship exceeds the daily needs of the family in the name of the family, does not belong to the joint debt, however, 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.

Accordingly, there are three channels for the determination of common debt, each with its own focus of proof:

1. Channel for Joint Expression of Intent: Both parties sign jointly, or one party subsequently ratifies the agreement through methods such as repayment or confirmation. Signing constitutes a joint expression of intent, and discussing the intended use afterward is no longer meaningful.
2. Family Agency Channel: One party needs to borrow money for the daily life of the family in his own name. Daily catering, education and medical care, utilities, and regular household consumption are generally within this range and do not require additional proof from creditors.
3. Proof channel beyond the daily needs: large investment, house purchase and car purchase, business turnover usually exceed the daily needs of the family, at this time, the burden of proof shifts to the creditor-it must be proved that the money is used for the couple's common life, joint production and operation or based on the common intention. This transfer is the most favorable design in the set of rules for the non-borrowing party.

Personal debt usually includes four types of high-frequency situations: one is the debt incurred before marriage and not used to live together after marriage; the other is the debt incurred by one party who subsidizes the person without legal support obligation; the third is the debt incurred by one party who engages in gambling, drug taking and other illegal activities; the fourth is the debt that the creditor and the debtor clearly agree to be personal debt. In addition, deficits resulting from the use of common property by one party for high-risk investments unrelated to the family without the consent of the other party are often identified as personal burdens.

2. liquidation order: external joint, internal liquidation before division

The issue of the order of liquidation is often ignored in practice, but it directly determines the amount that each person finally gets. It is necessary to distinguish between two sets of logic: one for external communication and the other for internal use.

External: The joint debts shall be jointly and severally liable by both husband and wife, and the creditor may require either party to pay off all the debts without being affected by divorce or not and internal agreement.

Internally: According to Article 1089 of the Civil Code, the debts originally borne by the husband and wife living together at the time of divorce shall be repaid together; if the common property is insufficient to be paid off or the property belongs to each other, the two parties shall agree to pay off the debts, and if the agreement fails, the people's court shall make a judgment. That is, when the common property is divided, the common property shall be used to pay off the common debt first, and the remaining part shall be divided. If one party overpays the joint debt with personal property, it has the right to recover from the other party.

Deduce a scene to make it easy to understand (example, fiction): the couple's joint debt is 1 million yuan, and the joint property is 2 million yuan. The correct order is to repay the debt of 1 million yuan with common property first, and then deal with the remaining 1 million yuan according to the division rules. If the 2 million yuan is divided up according to "one person and one half" and then each takes 500000 yuan to repay the debt, the unborrowed party is forced to advance the other party with the shared common property, thus causing internal imbalance. The former is the standard procedure followed by the courts, while the latter is the pitfall that parties are most likely to fall into.

Debt commitment agreed in the 3. divorce agreement: internal validity, external confrontation

This is one of the most concentrated misunderstandings: no matter how clearly it is written in the agreement, it cannot control the creditors. The agreement on the assumption of debts in the divorce agreement is valid between the husband and wife and can be used as a basis for future recovery; however, without the consent of the creditor, the creditor cannot oppose the creditor, and the creditor may still require both parties to bear joint and several liability.

After the sued party pays off, it can recover from the other party according to the agreement-the support rate of the claim is relatively high, but whether the execution is in place depends on the solvency of the other party. The only way to truly obtain “exemption from liability” is to secure a written debt transfer agreement from the creditor prior to the incurrence of the debt or the divorce. Article 551 of the the People's Republic of China Civil Code stipulates that if the debtor transfers all or part of the debt to a third party, the consent of the creditor shall be obtained. Without the creditor’s consent, the agreement is only valid internally.

Practical Reminder: It is agreed that one party shall bear the mortgage and the other party shall "clean out" clause, which does not exempt any party from the repayment obligation to the bank. If the lending bank does not consent to the change of the borrower, both parties shall remain jointly and severally liable for the repayment of the loan; after one party has made the payment, it may seek full reimbursement from the party who acquired the property pursuant to the divorce agreement.

4. Three layers of defense after being sued by the creditor

There are two taboos when receiving a summons: one is not appearing in court, and the other is a general denial. The rule of shifting the burden of proof in the absence of a trial is difficult to activate and the risk is multiplied. The defense must fall on a specific evidentiary structure, and it is proposed to expand the three layers in turn:

1. Level 1: Whether there is a real loan relationship. Creditors are required to submit documents of transfer rather than just IOUs; large cash deliveries, in particular, may call into question the authenticity of the delivery and may require the source of the funds and details of the delivery.
2. The second layer: whether it is beyond the daily needs of the family. If the amount obviously exceeds the daily consumption level of the local family, the creditor shall prove that the money is used for the husband and wife to live together or jointly produce and operate.
3. Level 3: The actual destination of the money. Explain the flow of funds into the other party's personal account or for purposes unrelated to the family through the bank flow; if necessary, submit an application for investigation and evidence collection of the transfer flow, and cooperate with the application for court investigation, the success rate of defense will be significantly improved.

5. Common misconceptions

Misconception 1: If the agreement states that the other party assumes the debt, you are automatically exempt from liability. Positive solution: Without the written consent of the creditor, the internal agreement can not fight against the external creditor's rights; after being recovered, it can only be recovered from the other party according to the agreement.

Misunderstanding 2: Do not cross-examine the IOUs. Correct answer: For a large-amount loan supported only by a promissory note and lacking proof of transfer, failing to challenge the fact of delivery is tantamount to waiving the right to raise a defense; the creditor should be required to provide evidence of the funds’ delivery.

Myth 3: Do not appear in court after receiving a summons. Correct answer: The rule whereby the burden of proof shifts in cases of default judgment is difficult to invoke, making it highly likely that debts will be deemed joint and several, thereby multiplying the associated risks.

Misunderstanding 4: Ignoring the limitation of recovery. Correct solution: after the settlement should be claimed in a timely manner, the delay may exceed the three-year statute of limitations.

Myth 5: Sign the IOU. positive solution: the signature is regarded as the expression of common intention, which belongs to the first channel of common debt, and it is meaningless to talk about the purpose afterwards.

Myth 6: No nuclear debt when dividing property. Positive solution: if the property is divided first and then the common debt comes out, it will disrupt the already reached plan, and the debts under the names of both parties should be completely sorted out before the division.

6. the process from response to execution and the spouse problem in execution

Once a debt dispute enters a lawsuit, it is necessary to know the rhythm and nodes in mind: after receiving the copy of the complaint and the court summons, the reply is generally submitted within 15 days (subject to the court's notice), and the evidence exchange is completed within the evidence period; those who are not satisfied with the judgment of the first instance can appeal within 15 days; if the other party fails to perform after the judgment takes effect, they enter the execution procedure. If an application for property preservation is made during the period of being sued, the account and property of the other party may be frozen to prevent the judgment from being lost.

It is especially necessary to prompt a high-frequency misunderstanding: In the execution procedure, it is not allowed to directly add the spouse as the person subject to execution on the grounds of "joint debt of husband and wife". The current enforcement change additional rules do not list the spouse as an additional subject. If creditors want to enforce the spouse's property, they usually need to list the spouse as a co-defendant at the litigation stage, or sue separately to confirm the joint debt after obtaining a successful judgment against one party, and only after obtaining the enforcement basis can the execution be carried out-this procedural boundary determines whether the "who to sue first and how to sue" directly affects whether the execution can touch the spouse's property. On the other hand, the spouse sued by the creditor should not take it lightly because "the judgment did not write me": the possibility of creditors suing to confirm the joint debt always exists, and the proper preservation of evidence of the use of funds is still the first priority.

for the recovery after settlement, the procedure should also be followed: sue separately according to the divorce agreement or internal agreement, and the limitation of action is generally three years from the date of actual settlement; whether the recovery judgment can be implemented in place depends on the solvency of the other party, evaluate the property status of the other party before settlement, and apply for property preservation if necessary.

7. Daily prevention of debt risks: three types of proactive measures

Instead of going round and round in the identification of "common or individual" afterwards, it is better to do three things in advance: first, the arrangement of matrimonial property should be written-to agree on the attribution of marital property, and to inform the main creditors in written form and keep evidence that although it can not fight against bona fide creditors, it can strengthen the internal characterization; second, the management of accounts and signatures-the regular check of joint accounts and large expenditures, do not sign the IOU and guarantee documents at will; Third, the "firewall" of one party's business family-corporate liabilities and family property as far as possible isolation, personal accounts do not mix corporate funds, the company's external financing to clarify the scope of personal guarantee. Blocking risk before it happens is more effective than any defense.

A common question associated with it is: "Does the debt sharing clause in the divorce agreement need to be notarized?" The explanation for this is: No, the written agreement takes effect when signed by both parties and is binding between husband and wife, and notarization only enhances the probative force. It should be emphasized that notarization cannot change the rule of "no confrontation with creditors without the consent of creditors"-those who really want to cut off external liability still need to obtain the written consent of creditors.

A common question associated with it is: "Is it a joint debt for a party to provide a guarantee for a company loan in his own name?" the explanation for this is: look at the nature of the guarantee and the attribution of the company's income: one party provides a guarantee for the financing of the company (especially its personally operated enterprise). If the company's operating income is used for family living together, the debt of the guarantee may be deemed to be related to the common interests of the family; On the contrary, purely commercial guarantees unrelated to the family are usually regarded as personal debts. When a case is brought, the burden of proof typically revolves around whether the guarantee was based on a joint expression of intent and whether the company’s profits were used for family purposes; there is considerable variation from one case to another.

A common question associated with it is: "After the judgment confirms the joint debt, can the personal property of the other party before marriage be executed?" The explanation is: Yes. Joint debts shall be jointly and severally borne by both spouses using all of their assets, including premarital personal property; after payment, either spouse may, pursuant to any internal agreement, seek reimbursement from the other for the portion that the latter is obligated to bear. The internal agreements of prenuptial property agreements and divorce agreements cannot be used against external creditors, but can be used as a basis for internal recovery.

8. Frequently Asked Questions

If the other person borrowed money on their own, am I still required to repay it?

Not necessarily. Debts incurred for the daily living needs of the family are generally recognized as joint debts; if the debt clearly exceeds such needs, the creditor must prove that the funds were used for the common life of the spouses or for their joint production and business activities; otherwise, the debtor shall bear the liability personally.

The divorce agreement states that the debt belongs to the other party. What if the creditor still finds me?

Initial defense: Verify the authenticity of the loan, determine whether it exceeds the needs of daily family life, and ascertain the destination of the funds. If the person is found to be jointly and severally liable and actually paid off, the full amount may be recovered from the other party in accordance with the divorce agreement.

The common property is not enough to pay the common debt, what about the rest?

shall be paid off by agreement of both parties; if the agreement fails, the court shall decide. The insufficient part is not eliminated by divorce, and both parties still need to bear joint and several liability for settlement, and then share it internally according to the agreement or judgment.

How to prevent the other party from borrowing money outside to trouble me in advance?

You may enter into a written agreement stipulating that each spouse’s property during marriage shall be owned separately and retain evidence of such agreement, and notify the principal creditors accordingly; regularly reconcile your credit reports with the transaction records of joint accounts to promptly detect any unauthorized borrowing. However, internal agreements cannot be used against bona fide creditors, and the most effective is still the management of joint accounts and signatures.

Does the other party secretly borrow money for gambling count as a common debt?

Not counting. Debts incurred by one party through illegal activities such as gambling or drug use constitute personal debts and shall be repaid from the debtor’s personal assets. If a lender knowingly provides funds that will be used for gambling, the loan itself is not protected by law. When the other party is sued, it is sufficient to defend itself around "illegal use + not used for family life" and submit evidence of the flow of funds.

9. Practical Insights from a Lawyer

When dividing property, everyone stares at the house and savings, and the real surprise is often the debt. First, we should look at the three sets of independent rules separately: the husband and wife shall bear joint and several liabilities for the common debts, and the internal debts shall be paid off in the common property first, and the rest shall be divided again;The agreement in the divorce agreement on who the debt belongs to is only valid between husband and wife and cannot be opposed to creditors without the consent of creditors. Many of the contradictions are due to the mixing of these three sets of rules, thinking that everything will be fine if the agreement says "debt belongs to him", but they are still sued together.

When being sued by creditors, the party who did not borrow can organize materials along three layers of defense: whether the debt has the common meaning of both parties; whether it belongs to the daily needs of the family; if it is obviously beyond the daily needs, whether the creditor has proved that the money is used for living together or operating together. Accordingly, collect your own income and living expenses records, evidence of the use of the other party's debt, and evidence of the flow of money. In terms of internal relations, it is also necessary to calculate the difference between external settlement and internal sharing. If one party overpays the common debt with its own property, it can recover from the other party in accordance with the law, and this part of the rights and interests should not be released at the time of mediation.

The more stable way of thinking is to prevent in advance: keep informed of large loans daily, do not sign or reply in IOUs or dunning information at will to avoid the formation of ratification; try to jointly sign or keep written opinions on the disposal of common property and external guarantee. When negotiating, if the other party wants you to bear his own personal debt, return to the two points of "whether it is for the family's benefit and where the money has gone. The "external how to deal with creditors, how to share" separate agreement, so as not to divorce and be dragged back to court by the old debt.

The correct order to deal with the debt problem is: first find out, then characterize, and finally talk about sharing. Finding out refers to making a complete review of the loan, guarantee and credit records under the names of both parties before the division is discussed, so as to avoid new debts after the agreement is signed. Qualitative refers to judging whether it belongs to the common or individual person one by one, and putting the burden of proof on the party to bear it. When talking about sharing, we should clearly realize that the internal agreement only solves the problem of recovery and does not solve the external responsibility. To truly sever the chain of contingent risks, creditors must be brought in on a formal, written basis. In the case of one party in the family doing business, it is more worthwhile to establish the habit of account separation and written confirmation of large expenditures in advance to block the risk before it occurs.