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How to divide the money lent by Ningbo couples during divorce?

Ningbo Author：LuXu WANG

When a couple lends money and keeps the promissory note in a drawer, that “loaned money” is often forgotten by the time they get divorced. Some people believe that as long as the money hasn’t been recovered, it doesn’t count as marital property and will become untraceable once the divorce proceedings are finalized; others think that whoever signed the promissory note is solely responsible, and the other party bears no liability. Neither of these ideas is accurate. “”Money that has been lent out” is, under the law, a claim and constitutes one type of marital joint property.As long as the debt was incurred during the marriage and was lent out using marital property, it must be divided upon divorce, typically in equal shares between the two parties. In this paper, combined with the real judgments of Ningbo and local courts, the "borrowed money divorce how to divide" clearly: first distinguish whether it is a common creditor's rights, and then talk about the maturity, unexpired, can not be collected back of the three situations how to deal with, and finally the litigation, evidence and it and the difference between external debt.

1. Why is "creditor's rights" also considered joint marital property?

to understand "the money borrowed should be divided", the first step is to figure out what the creditor's rights are. A claim is not money itself, but rather the “right to demand that someone repay a debt.” This right can be transferred, inherited and disposed of as property, so the law regards it as a property right. Article 1062 of the Civil Code stipulates that the following property acquired by the husband and wife during the existence of the marriage relationship shall be the joint property of the husband and wife: wages, bonuses, remuneration for labor services; income from production, operation, and investment; income from intellectual property; inherited or donated Property (except those determined to be owned only by one party in a will or gift contract); other property that should be jointly owned. Husbands and wives have equal rights to manage their joint property.

This provision does not explicitly use the term “creditor’s rights,” but its meaning is clear. The creditor's rights formed by the joint operation, joint investment and joint lending of the husband and wife within the marriage come from the "income of production, operation and investment" and belong to the common property, and even if one party lends with personal property, the income formed by the continuous management and collection of interest after marriage, in addition to the interest and natural appreciation, also belongs to the common property. In other words, as long as it is formed during the existence of the marriage relationship, the external claims related to the husband and wife living together or operating together, in principle fall on the common property plate.

This point has been repeatedly affirmed in judicial practice. In a case in Ganzhou, Jiangxi Province, Li lent out RMB 2.325 million during his marriage. The borrower was subsequently ordered by the court, through mediation, to jointly and severally repay the relevant amount, ultimately resulting in the recovery of RMB 3.2 million. During the divorce, the parties merely included a general clause in their agreement stating: “Each party shall retain and be responsible for any debts and claims held in their own name during the marriage.” The court held that this constituted a general statement, failing to confirm or delineate the specific claims; therefore, it was deemed that no division of the debt had been made. Ultimately, the court ruled that Li shall return half of the couple’s joint debt—namely, RMB 1.6 million—to his ex-wife. It is evident that, as long as a debt arose during the subsistence of the marriage and was not actually resolved at the time of divorce, the court has the authority to bring it up for division after the divorce.

Conversely, to determine whether a “loaned sum of money” should be divided, the key lies in two factors: first, whether the debt arose during the marriage; and second, the source of the funds that constituted the debt. These two factors determine whether it constitutes a joint claim or an individual claim.

2. First, determine: is it a joint claim or an individual claim?

Not all "borrowed money" needs half a person. Before dividing, first determine the nature.

  • During the existence of marital relationship, the creditor's rights formed by the loan of the joint property of husband and wife. For example, after marriage, the wages and savings of the two people are saved together and lent to relatives and friends, which is a common claim.
  • Accounts receivable arising from joint business after marriage. The husband and wife set up shop, set up factory and do engineering together, and the payment owed by the customer belongs to the common creditor's rights.
  • One party invests and lends personal property, and continues to manage the income generated by the operation after marriage. The principal of the investment may still belong to the individual, but the proceeds from the operation after marriage belong to the common property, and the corresponding claims shall also be treated as common property.

The following kinds, which usually belong to personal creditor's rights, do not participate in the division: the creditor's rights formed before marriage, the money lent before marriage and not recovered at the time of divorce, in principle, belongs to the original creditor; lent with clear personal property, and both parties agree that the creditor's rights belong to the individual; obtained by inheritance or gift, and only one party's creditor's rights are determined in the will or gift contract; if the husband and wife agree in writing that they own the property, they shall be dealt with according to the agreement.

It should be noted that, in practice, it is often difficult to determine whether the loan is made using personal property or marital joint property. Once money is pooled into a joint account and used to cover household expenses, it becomes difficult to determine which portion belongs to whom. Therefore, in the event of a real dispute, the party claiming that the claim belongs to the individual and should not be divided bears the burden of proof and cannot produce evidence, and the court usually treats it as a joint claim.

3. How to divide joint debts: those that have matured, those that have not yet matured, and those that cannot be recovered.

Once it is determined to be joint debt, how is it divided? Legally, the court first examines any agreement between the parties; if no agreement can be reached, the court will make a ruling. The core principle of division is the same as that for dividing a house or a bank deposit: items that can be equally divided are split accordingly; those that cannot be equally divided are either valued at their fair market value or converted into cash, and any assets that cannot be recovered are handled separately.

Matured claims with a fixed amount are the easiest to handle. The court will typically confirm the amount of the debt and render a judgment awarding each party a specified share. In a case in Shenyang, Liaoning, the married sister's brother-in-law borrowed 210000 yuan from the couple. What if the divorce agreement didn't write the money. The court found that 210000 yuan belonged to the joint creditor's rights of husband and wife and decided that each enjoyed 105000 yuan. The debtor later returned 60000 yuan to one party, 60000 yuan to each 30000 yuan, and the remaining 150000 yuan to each 75000 yuan, and ordered the actual payee to pay 30000 yuan belonging to the other party. It can be seen that the recovered part is directly divided, the unrecovered part is recognized as a share, and each person claims to the debtor according to his share.

For claims that have not yet matured, the repayment period agreed by the borrower has not yet arrived, and it is generally not easy for the court to directly judge "divide the money now", because the performance period has not yet expired. There are two common practices: first, the judgment confirms the share of the creditor's rights of both parties, and then redistributes the creditor's rights when they are due, or claims in another case. Which one to use depends on whether the value of the claim can be determined and whether the parties are willing to take over.

For receivables that cannot be recovered or are at risk—particularly when the debtor lacks the capacity to perform, their whereabouts are unknown, or there is dispute as to whether the claim itself is valid—the court will handle such cases with due caution. In such a situation, treating it as “money already in hand” and distributing it would be unfair to the parties involved. In practice, the court may award the claim to a party more qualified to recover (e. g. the creditor is a relative of the debtor and is more familiar with the situation), and at the same time order that the other party to pay reasonable compensation. A judgment directly pointed out that the common claim involves the interests of a third party, the court is very cautious in dealing with it, often only the amount of the determination, the debtor's approval of the claim, the dispute, inform another lawsuit to resolve.

In any case, there is one red line that must not be crossed: neither party may, without the other’s knowledge, unilaterally waive or forgive a joint claim, or transfer it at an undervalue. Such acts have damaged the property rights and interests of the other party, and the other party may claim compensation for this.

4. How to file a lawsuit: cause of action, defendant, debtor, enforcement

Knowing you can get a share isn’t enough; you also need to know how to actually receive it. This section addresses several key procedural issues.

1. What is the cause of the case. The joint creditor's rights discovered after divorce or not dealt with at the time of divorce usually take "property dispute after divorce" as the case cause to sue. The basis is Article 18 of the Interpretation (I) for Marriage and Family: After divorce, if one party sues for division on the grounds that the joint property of the husband and wife has not been disposed of, after examination, it is indeed the common property not involved in the divorce, and the court shall divide it according to law. The aforementioned Ganzhou case and Shenyang case both involve post-divorce property disputes. It should be noted that if an issue has already been definitively resolved during the divorce, it cannot be relitigated on the same grounds; otherwise, the court will deem it a repetitive claim.

2. Who to sue. The defendant in such cases is usually the original spouse, not the third person who owes money. Because the lawsuit solves the problem of "who should belong to this creditor's rights and how much should be divided", which belongs to the division within the husband and wife, not to ask the debtor to repay the money. In the Ganzhou case, the plaintiff listed Wang mou, the third person who collected the money on behalf of him, as the defendant. the court made it clear that the property dispute after divorce only dealt with the distribution of undivided property between the two parties of the divorce, which was not directly related to the outsider, so it rejected the request to the third person.

3. Whether the debtor should appear in court. No. The division of a claim merely determines the respective shares held by each spouse; it does not require the debtor to perform immediately and has no substantial impact on the debtor’s substantive rights. A court has stated clearly in its judgment that the division of joint claims does not require the debtor to perform an obligation; therefore, it does not have a substantial impact on the debtor’s rights, and there is no need to add the debtor as a party to the proceedings. Of course, if the establishment of the claim itself is disputed and involves the interests of a third party, the court may not deal directly with the property dispute after the divorce, but let the parties claim to the debtor in a separate case.

4. How is the judgment enforced? If the creditor's rights have been actually recovered and the money is in the hands of one party, the court can directly order the party to pay the part belonging to the other party, and this kind of judgment can be directly applied for enforcement. If the judgment only confirms the share and the money has not yet been received, the practical significance of enforcement is limited and it needs to wait for the realization of the claim before claiming it. Each person can also recover from the debtor separately based on his own share.

5. Several of the most common difficulties

Difficulty 1: Only the name of the husband and wife is written on the IOU.This is the most common scenario. As long as the money lent comes from the joint property of the husband and wife and the loan takes place during the marriage, even if the debit note contains only one person's name, the claim is usually recognized as a joint claim. However, in the way of division, the court, for the sake of "convenient exercise", often awards the claim to the nominal creditor on the debit note, and he (she) pays the corresponding compensation to the other party, instead of letting each party take half to find the debtor separately. Therefore, the name of the IOU affects "who will hold it and who will chase it", not "who owns it".

Difficulty 2: There is no written IOU. No debit note does not mean no claim, but it is much more difficult to prove. In a case in Chongqing, the divorce agreement agreed that the debtor was responsible for collecting and distributing the money owed by the man, but the two parties said the source of the money, the nominal lender and the loan, and could not produce the evidence of the claim, and the court could not support one party's request for the other party to "collect and pay immediately. As can be seen, merely having a stipulation in the divorce agreement without any loan documentation makes it very difficult to enforce one’s claim.

Difficulty 3: Cash delivery, no transfer record. If a large loan is delivered in cash, without the evidence of bank flow, the court will require the parties to add details such as the source of funds, the time and place of delivery, and the people present, and make a comprehensive judgment. Litigation really depends on details. There is only a debit note and it is not clear how the money is given. The risk is very high.

Difficulty Four: Debtors collude with one party to default. The debtor and one party are relatives, friends or business partners, and it is easy to cooperate to deny the loan, delay repayment, or reach a private settlement, pay less or even not. The idea is: the other party should fix the evidence of the claim as soon as possible, claim the right against the debtor in its own name in a timely manner, and confirm the claim through litigation if necessary.

Difficulty No. 5: The debtor repays the money to only one of the creditors, who then keeps it all for themselves.This is the most realistic dispute. Once money is put into one party’s pocket, the other party often cannot get it back. Legally, any funds that have been recovered constitute joint property, and the party in possession shall remit the other party’s share. This is how the Shenyang case was handled: the debtor had returned 60000 yuan, and both parties were sentenced to 30000 yuan each, and the man who received the payment paid the woman 30000 yuan. Therefore, upon discovering that the debtor is preparing to make a repayment, the other party should promptly assert its claim or directly notify the debtor to pay its share, so as to avoid the situation where “the money ends up in someone else’s account and you fail to receive your due portion.”

Key points of proof in 6.: to file a lawsuit is to fight evidence

To claim the division of joint creditor's rights, three things need to be proved: the real existence of the creditor's rights, the existence of the creditor's rights, and the money lent comes from the common property. Prepare evidence around these three matters.

  • Creditor's right itself: IOU, IOU, loan contract, repayment plan, conciliation statement or effective judgment. A creditor’s right that has been confirmed by an effective legal document carries the strongest evidentiary force.
  • Proof of Funds Disbursement: Bank transfer records, screenshots of WeChat or Alipay transfers, receipts for cash payments, and withdrawal slips. Ideally, it should display “from whose account” and “to whose account.”
  • Source of Funds: The loan money comes from payroll cards, joint deposits, and joint-operated accounts, which are used to prove that this is common property, not personal property.
  • Collection records: WeChat chat, SMS, call recording, payment letter, lawyer's letter and litigation materials, which can not only prove that the creditor's rights have not expired, but also prove that the other party knows that the creditor's rights exist and has not given up.
  • Divorce materials: divorce agreement, divorce certificate and effective divorce judgment, which are used to prove that the creditor's rights were not dealt with at the time of divorce or that the other party was concealing.

Special reminder: If the claim is that a debt is an individual claim and should not be subject to division, the burden of proof rests with the party asserting this; similarly, if you allege that the other party concealed a debt, you must provide corresponding evidence—speculation alone is insufficient.

The difference between 7. and "foreign debt": splitting or repaying money

The title says "money borrowed" and "money owed to others" are two directions, but many people will mix. To put it simply: what is lent is creditor's rights, and when divorce is divided, what is owed to others is debt, and when divorce is paid back.

Common creditor's rights are the money "owed to us by others", which belongs to common property, and should be divided into shares and profits when divorcing.

Common debt is money that "we owe to others. Article 1064 of the Civil Code provides that debts incurred by the husband and wife in the form of a joint signature, or by one of the spouses after the fact, and debts incurred by one of the spouses in his or her own name for the daily needs of the family, are joint debts. Debts incurred by a party in its own name that exceed the daily needs of the family are not, in principle, joint debts, unless the creditor can prove that they are used for joint life, joint production and operation, or on the basis of a common intention. Article 1089 stipulates that in the event of divorce, the joint debts of husband and wife shall be repaid jointly.

There is another important difference between the two: the division of creditor's rights only binds the husband and wife, and cannot oppose the debtor; while for the external commitment of debt, the creditor still has the right to claim the joint debt to both men and women. That is to say, even if the divorce agreement stipulates that "the debt shall be paid by the man", the creditor can still sue the woman, and after the woman has paid it, it will recover from the man according to the agreement or judgment. If you understand this direction, you won't mix up the "sharing of money" and the "repayment of money.

8. Practical Recommendations

  • After marriage, when lending money to others, try to keep written evidence whenever possible. The debit note states the lender, the borrower, the amount, the purpose, the repayment period and the interest, and it is best to have transfer records to confirm each other.
  • Lending large amount should be signed by both husband and wife as far as possible, or funded by both accounts, so as to avoid the dispute of "joint creditor's right or individual creditor's right" in the future.
  • During divorce, proactively and clearly address claims or debts. Don't just use general expressions such as "each of the claims and debts in their respective names", but write down the creditors, debtors, amounts and methods of distribution on a case-by-case basis, otherwise they may still be considered undivided in the future.
  • find that the other party conceals the creditor's rights, fix the evidence as soon as possible, claim in time, and pay attention to the limitation of action.
  • For the creditor's rights involving relatives and friends, the scheme of "one party holding and discount compensation" should be given priority, which is not only convenient for recovery, but also can reduce the direct conflict with the debtor.

class case reference: in the case of property dispute after divorce between yu mou and lu mou, the court determined that the project funds and private loan creditor's rights that were not dealt with at the time of divorce belonged to the joint creditor's rights of husband and wife, which were shared by each half, and the court ordered to divide them accordingly and deal with the joint debts together. It can be seen that the money lent is a joint claim of the husband and wife, and even if it is not recovered at the time of divorce, it can still claim division after divorce. Trial Court: Case No. of Beilun District People's Court of Ningbo City, Zhejiang Province:(2018) No. 71

12of Zhejiang 0206 Minchu

9. Frequently Asked Questions

Question 1: How to divide the money when you lend money to relatives during marriage?

Answer: As long as the common property is lent within the marriage, it is generally recognized as the common creditor's right, and it should be divided in the divorce, usually with equal shares. Taking into account the relationship, the court may also award the claim to be held by a party more familiar with the debtor and pay the other party the corresponding compensation.

Question 2: The IOU only has my ex-husband's name. Can I still share it?

Answer: Yes. The name written on the promissory note does not affect the nature of the claim as joint property. As long as it can be proved that the money was lent with common property during the marriage, you can claim the corresponding share.

Question 3: Will the court divide the money directly when the divorce is over before the repayment period?

Answer: For the unexpired creditor's rights, the court generally confirms the shares of both parties first, and then redistributes them after the creditor's rights are due to be realized. It may also be obtained by one party at a price and compensated at a discount to the other party. It is relatively rare for a court to directly order “split the money now.”

Question 4: If the borrower defaults and the money cannot be collected, who will be responsible for the divorce?

Answer: An uncollectible claim remains a joint claim; it simply has a lower current value. The court may award it to the more qualified party and compensate the other party, or it may inform the party to claim it after the claim is realized. Just because it can’t be recovered doesn’t mean it doesn’t need to be divided.

Question 5: The other party concealed this creditor's right during the divorce, and now it is discovered, can it be sued again?

Answer: Yes, it is possible. The court shall divide the "property dispute after divorce" as long as it is found to be the common property that was not dealt with at the time of divorce after examination. Be sure not to exceed the statute of limitations, and prepare the relevant evidence.

Question 6: It is written in the divorce agreement that "each shall bear the creditor's rights and debts", can it be divided?

Answer: It needs to be distinguished. If the agreement simply states in general terms that "the claims and debts under their respective names shall be enjoyed and borne separately" and is not confirmed and divided on a case-by-case basis, the court may consider that the claim has not actually been dealt with and can still be divided; if the agreement has been clearly dealt with on a case-by-case basis, it cannot generally be divided.

10. Practical Insights from a Lawyer

Money that’s lent out is the easiest to lose track of. Many people think that if the money is confiscated, it will not be considered property, or that whoever signs the IOU will be the owner. Both of these ideas will suffer. The first step in practice is not to fight for how to divide, but to determine whether the debt is formed within the marriage and whether the money lent is the common property of the husband and wife-as long as both answers are yes, it will fall on a divisible plate, even if the debtor has not paid a cent at the time of divorce. Therefore, the thing to do now is to find out the loan contract, transfer record and reminder chat while the debit note is still there, and at the same time find out whether the other party also knows the existence of the money.

Next, we need to categorize and process it. Has matured claims are relatively simple, can be agreed by one party to obtain claims, the other party to take discount compensation. There is a common pit here: in the agreement, the general clause such as "each has the right to bear the creditor's rights and debts under their respective names" means that both parties have not really dealt with the creditor's rights, and there is still the possibility of being pulled out again in the future. If you want to do it once and for all, you have to write it down one by one.

Negotiation and subsequent collection efforts should be planned together. First find out the other party's attitude towards this claim: does he not know at all, or does he want to take it all? If he is the one who handles the loan, he should be prevented from privately clearing with the debtor during the negotiation period, transferring the money back, and applying for property preservation if necessary, or directly suing the debtor in another case and notifying the other party. When talking about the conversion of claims into amounts, and real estate, deposits together with the package trade-off, than a separate fight for a collection of accounts is much more real; at the same time, don't forget the statute of limitations, delayed claims themselves will be discounted.

Whether or how to divide the money lent by Ningbo couples during divorce is not complicated. The key is to grasp the three lines. The first is the nature line: the creditor's rights formed by the loan of common property within the marriage belong to the common creditor's rights of the husband and wife, are common property, and should be divided in the event of divorce. The second is the dividing line: has expired, the amount is determined, the confirmed share, one person half, has been recovered direct distribution of money ". The third is the procedural line: to sue the original spouse for a "post-divorce property dispute", the debtor does not have to appear in court, and the money recovered is in the hands of whoever wants it. Think clearly about these three points, and with evidence such as IOUs, transfer records, collection records, etc., most problems can find a way out.