My spouse encountered a large amount of credit card debt in the marriage. When liquidating the assets and liabilities in the settlement agreement, should they be liable for these debts?
In California, section 910 of the Family Code stipulates that the community shall bear all debts incurred during and before the marriage. It does not matter whether the debt is for the benefit of one's spouse or for the family. The name displayed on the bill or credit card statement is also irrelevant. If it happened during the marriage and before the separation, then this is a kind of community property debt, and both husband and wife are equal. This means that when the two parties are negotiating a settlement and clearing the balance sheet, these debts should be divided equally. A better option might be a spouse agreement to repay common debt in exchange for a greater share of community property. Repayment of debts by spouses can at least ensure the payment of common debt, as both spouses should bear financial responsibility for creditors as long as the debt is jointly owed.
If a married couple repays one's premarital debt?
Consider this example. Bob and Jackie were married. Bob had a huge credit card debt before he got married. Bob and Jackie hope to increase their credit rating so that they can buy a house. They agreed to pay off Bob's debt. However, once they had no debt, Bob proposed to dissolve. In this case, Bob and Jackie used the income of the community property to pay off Bob's individual property debt. California case law stipulates that the community has the right to repay the amount it paid for the release of a party's individual property debt. 1 Therefore, in the above example, the community has the right to repay Bob's debt.
What happens if one party uses their separate property to pay off their community property debt?
In this example, after they got married, Bob and Jackie took holidays and paid huge debts. Jackie sneaked into the brokerage account she established before the marriage to pay off the holiday debt. In this case, Jackie used her separate property to pay off the community debt. California's case law stipulates that spouses who use individual property to meet community debt before marriage and separation are presumed to provide gifts to the community. 2 Therefore, in the above example, Jackie has no right to repay community vacation debt.
There is an important exception to his rule. Article 2640 of the Family Law states that if one party uses its separate property to purchase community property, the paying spouse has a legal right of recourse if it does not give up its written rights. Contributions to acquisitions of property include down payments, improved payments, and reductions in the payment of loan principals used to purchase or improve property. They do not include the payment of interest on purchase of property loans, or the maintenance of property, insurance, or tax payments. So, in the above example, if Jackie used her separate real estate brokerage account to pay back the co-mortgage principal or pay the down payment, she would owe it to repay the amount.
After separation, a spouse uses its separate property income or property to pay off community debt.
In this example, after Bob and Jackie were separated, Jackie continued to drive the BMW, buying a BMW through a loan during the marriage. Bob continues to pay the loan in the car. Can Bob ask to repay all of his compensation payments from the date of separation to the trial date?
California case law establishes a basic principle that when a spouse uses income or other independent property to pay for the original community obligation after separation, it should be compensated from the community property after dissolution. 3 After the California Supreme Court established the case of this rule, these are traditionally referred to as "Epstein's credit."
Under this general, Bob could theoretically apply for credit for all his payments on car loans after separation. But what if Bob drives and pays? Is it unfair that Bob has the right to use this car and demand repayment of credit? This is what the court said in Epstein. It provides an exception to the general rule of paying a spouse to also use assets, and "the amount paid does not actually exceed the value of use." So this means that if Bob drives a car, he will not apply for a loan for monthly payments, but if he pays a lump sum, he may apply for a loan.
There are two other important exceptions to the general rule of Epstein: the spouse who uses a separate income or property to pay the original community obligation is entitled to repayment: (a) if an agreement between the parties is reached, payment will not be made Reimbursement, and (b) Payment is intended as a gift or as support for a child or spouse.
After separation, spouses use community property funds to pay for their living expenses. What are the consequences?
In this example, Bob and Jackie separated and Bob agreed to pay $1,000 a month for support and "Whatever you need to save." Jackie took out $1,000 of community property from the Union Bank account to cover all living expenses. California case law stipulates that if one spouse uses community property to pay a separate obligation beyond the reasonable amount of children and spousal support after separation, the community is entitled to compensation. 4 A reasonable amount may be the amount of guidance support provided by the court when applying for provisional children and spousal support. In the above example, if this amount is $1,500, Jackie will have to repay the community $500 (she received $2,000 - $1,500). In the area of community property distribution, she will reduce $250 in community property. Since this rule comes from Epstein, both parties can waive the rules in writing and agree that such payments will not reduce the property of the community.
After separation, one spouse stays at home and the other spouse pays the mortgage. What are the consequences?
Frequently, one spouse leaves the family ("spouse") and the other spouse lives with the children ("spouse"). Going out usually means that the husband can maintain the status quo by continuing to pay mortgage payments and other payments (such as property taxes) to maintain the status quo. In this case, the internal spouse should be warned of the serious consequences of this arrangement when testing.
We have already seen a conclusion. Aliens who pay for mortgage payments may be entitled to receive Epstein credit because they are paying a separate property income to public property debt unless an agreement relinquishes such repayment or such payment is in the form of a child or spouse support appeared.
Another major result is that if the reasonable rental value of the family home is higher than the mortgage payment, the internal spouse may be required to repay the community with the departure date trial date. After the rule-making case was established, these were called charges of Watt. 5. The general rule is that if a spouse has exclusive use of community assets during the separation and trial period, the spouse may be required to compensate the community for the reasonable value of the use. Consider this example. Bob and Jackie are separate. Jackie and the children left home after they separated. Bob agrees that he will continue to support the family and pay for mortgages and other expenses. Mortgage loans are $1,500 per month. If Jackie had to pay the fair market rent for the property, she would pay $2,500 a month. Bob paid 10 months of mortgage from the date of separation to the trial day. Bob may argue that he should re-inject Watts's $10,000 ($2,500 - $1,500 x 10) fee. In the community property division, he is entitled to an additional $5,000. Bob may argue that he should also be entitled to another $15,000 ($1,500 x 10) of Epstein credit, which will increase his share of community property by $7,500.
This means that when Jack thinks that Bob supports her and maintains the status quo, her community property rights will be reduced by $25,000? Isn't that unfair? 7. You think this is the case, but this did not prevent the Court of Appeal from granting Epstein the same amount of credit and wat fees in the Jefferies marriage (1991) 228 Cal. application. 3d 548. But wait. There is no exception in the rules, "in lieu of spouse support?" The answer is yes, but "before the court regards this payment as support, it must be clearly stated. In Jefferies, there is even a court order saying The payment is "instead of spouse support." However, the order also states that the court retains jurisdiction to characterize these payments and determine whether the husband is entitled to repayment.
In another case, the Court of Appeal's decision against Jeffries Quite the contrary, 6. In this case, the husband also paid the mortgage under the interim court order "instead of spousal support" and claimed the Epstein credit and Watts charges in the trial.The appeals court held that public policy and court orders The language required the court to deny the husband's demand for Epstein's credit.The court then decided that because the wife actually paid the mortgage loan, she did not have to pay any watts because the monthly mortgage payment was equal to the fair market lease value of the house.
The only way to resolve this confusion is to have the parties and their lawyers in the proceedings The agreement was reached as soon as possible if the spouse's payment of community debt (such as mortgage) and a spouse residing at the family residence should be considered spousal support, which will not generate Epstein's credit or watts if it is considered spouse support , any agreement or order should clearly state that the spouse's out-of-home and exclusive residence mortgages and other payments "should be treated as" spouses and child support payment spouses may not receive w, Epstein, Jeffries credit and fees (19659002) Who is responsible for credit card debt?
Section 2623(a) of the Family Code stipulates that the debt that occurs after the separation but before the dissolution of the judgment, if it is a minor child or a minor child The "non-essential necessities" are incurred by the spouse who incurred the debt, and if they are incurred because of the "necessities" of the spouse or minor children, unless they have a written agreement or order, they will be based on the needs of all parties and The ability of a spouse to guarantee his spouse in order to support when the debt occurs.
Usually occurs during marriage Services will be distributed among the parties. However, Family Law No. 2625 grants the court the power to transfer debts incurred during the marriage to one party if the debt does not occur for the benefit of the community. "[8] The Family Law 2602 stipulates that if the court finds that the amount has been severely misappropriated by the spouse of the wrongful act, the court may also offset the community share of the party.
Footnote:
1. Walter (1976) 57 Cal. App. 3d 997.
2. See v. See (1966) 64 Cal.App.2d 778. In Re Marriage of Nicholson (2002) 104 Cal.App.4.289, where the appeal of Court was held, the husband used his mother's $30,000 as his gift (ie, separate property ) Pay off the credit card (community property debt) so that they are eligible for a loan to buy a house, but he did not (19659002) 4. Epstein (1979) 24 Cal. 3d 76. Remarriage remarried (1983) 141 Cal. App. 3d 128.
4. Epstein, supra; In re Marriage Stalworth (1987) 192 Cal. App. 3d 742.
5. Win Marriage of Watts (1985) 171 Cal.App.3d 366.
6. In Re Marriage of Garcia (1990) 224 Cal. A 3d 885.
7. This is the conclusion of a family law commissioner: "The spouse of one of the parties moved out and allowed the separation of living arrangements to stabilize a set of financial liabilities, and then introduced this without first issuing a warning to the spouse of the other party. This is the first time a trial has been conducted like Watts. The concept of credit is as detrimental as it is to create a completely different set of financial assumptions." Commissioner Richard Curtis (2003)
8. Cairo, Marriage (1988) 204 Cal. application. 3d 1255. The gambling debt that occurs on the credit card of the marriage assigned to the husband.
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