I learned recently my wife defaulted on $70,000 in credit card debt. Most if not all of this debt she took on before we met. I had no idea she had these credit cards, and I am not a cosigner or authorized used on the accounts. Given we are now married and own a home, can her creditors come after our home? Does it matter if the home is owned in joint or common tenancy (California)?
What you are asking is covered by California Family Code Section 910(a), which reads in part:
Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.
Section 913 clarifies this further:
(a)...a married person is personally liable for the following debts incurred by the person’s spouse during marriage: (1) A debt incurred for necessaries of life of the person’s spouse while the spouses are living together. (2) Except as provided in Section 4302, a debt incurred for common necessaries of life of the person’s spouse while the spouses are living separately.
(b) The separate property of a married person may be applied to the satisfaction of a debt for which the person is personally liable pursuant to this section. If separate property is so applied at a time when nonexempt property in the community estate or separate property of the person’s spouse is available but is not applied to the satisfaction of the debt, the married person is entitled to reimbursement to the extent such property was available.
In other words, accounts and funds the non-debtor spouse has kept separate are may not be touched if the debt was not for the necessaries of life. However, if the debtor-spouse spent the money on luxuries, then the non-debtor spouse's separate property (accounts) cannot be touched.
Community funds, however, may be reached by a creditor to satisfy a debt.
Regarding real property, if the non-debtor spouse paid for the house from separate (non-community) funds, then there is a measure of insulation against a creditor placing a lien on the property. However, if community funds were used to purchase the property and pay the mortgage, then the creditors have a strong argument that the real property is a community asset, and can ask for a lien on that property.
The above is a brief examination of California's Family Code regarding spousal and community debt. Like all brief explanations, it lacks subtlety and discussions of caveats and exceptions to the general rule. Consult with a California lawyer who has experience with family law. He or she will review the specifics of your situation, review California Family Code Section 910-916, and give you precise advice.
If you have liability for the debt, learn more about your options in the Bills.com article Debt Relief Options: Which is Right for You? Bills.com makes it easy for you to apply for traditional forms of debt relief.
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