Character of Property: Credit Acquisitions

Question 1

What is the rule if an untitled asset is purchased partially with SP funds, but also with a CP loan?

Answer 1

It is divided proportionately

Example –> The use 20% SP funds, and 80% community loan. It is 20% SP and 80% CP.

Question 2

What is the general rule re: determining character of credit?

Answer 2

Credit acquired by one spouse during marriage is presumptively community credit.

To demonstrate loan proceeds or credit purchases are SP, the borrowing spouse must show that the lender PRIMARILY relied on borrower’s SP in granting the loan,

Question 3

Is apportionment made of the loan?

Answer 3

No.

No apportionment is made of the loan itself. Loan proceeds or credit are either community or separate, but apportionment may be made of the asset.

Question 4

What is the character of personal credit?

Answer 4

Personal credit of either spouse during marriage is CP insofar as it is based on earning capacity