Asian Journal- The Filipino-American Community Newspaper

COUPLES have different spending habits and different philosophy in handling marital finances. Some spouses are conservative in managing their finances and stick with a budget while other spouses do not even set budgets. What is your exposure if your spouse is a shop-a-holic and runs though his/her credit card like there is no tomorrow? What if your spouse has a gambling problem and continues to get in debt to finance his/her gambling habits or what if your spouse has child support arrears from a previous relationship? To add insult to injury, what if you are the primary bread winner in the family working two jobs at the hospital while your spouse philanders around for other prospects.

Generally, the community estate is liable for a debt incurred by either spouse before or during marriage and prior to separation. The liability accrues regardless of which spouse has management and control of the property or whether one or both spouses are parties to the debt or to a judgment for the debt. Fam.C. § 910(a) and (b). The communnity estate are the property and earnings accumulated during the marriage. In other words, your community property can be liable to creditors of your spouse for debts accumulated even prior to marriage. The community estate liability is not limited to debts incurred for the benefit of the community. Under Family Code § 910, the community may be liable even to debts incurred by one spouse exclusively for his or her personal benefit.

However, where community property is used to satisfy child support arrears arising from a previous marriage at a time where the spouse has separate property to satisfy it, the community has a right of reimbursement from the debtor spouse’s separate property up to the amount of community property used to satisfy the support obligation.

What then is exempt from your spouse’s premarital debt? A non debtor spouse’s "earnings" during marriage are not liable for debts incurred by the other spouse before marriage under Fam.Code § 911(a). This does not include income received from passive investments through. The non debtor spouse’s earnings cannot be garnished to satisfy the debtor spouse’s prematrital debt as long as it is deposited in a separate account and not comingled with other community property.

In addition, community liability for a debt "incurred during marriage does not include "the period during which the spouses are living separate and apart" before a dissolution or legal separation judgment. Family.Code. § 910 (a) and (b). Debts incurred by either spouse after separation are the debtor spouse’s separate obligation, neither chargeable