Liabilities of Spouses

Question 1

One Spouse Incurs Debt During Marriage - What can be used to pay it off?

Answer 1

If one spouse incurs debt during marriage, it reaches all CP and all debtor’s SP
* NOT non-debtor spouse’s SP

Question 2

Divorce: Outstanding Debt by One Spouse - Does it reduce the CP the non-debtor spouse gets upon divorce?

Answer 2

Non-debtor’s portion of CP (from divorce) can’t be reached by debtor spouse’s creditors IF:
* (1) Non-debtor spouse doesn’t have personal liability for debt
* (2) Court assigned debt to debtor spouse at divorce

(2) If debt incurred was NOT for benefit of the community, Court MUST assign outstanding debt without offset to DEBTOR (as his separate debt)
* Note that each spouse is personally liable for all debts they incurred

Question 3

Defense: Breach of Fiduciary Duty

Answer 3

If a spouse breached fiduciary duty to other spouse by incurring debt, that other spouse might have claim to recover 1/2 of CP used to pay off debt.

Question 4

Is each spouse personally liable for other spouse’s contracts for necessaries?

Answer 4

Yes, each spouse has duty to support the other spouse and minor children and is personally liable for other spouse’s food, clothing, medical bills, etc.

Use CP funds; if SP funds used, can get reimbursed from CP funds.

Question 5

What is the fiduciary duty each spouse owes to the other?

Answer 5

Fiduciary duty of the highest level of good faith and fair dealing

Neither party can take unfair advantage of the other

(This is fiduciary relationship that’s subject to same rights/duties of non-marital business partners)