- 6 min read
- Louisiana is one of 10 community property states.
- Debt created during marriage in Louisiana is presumed to be community debt.
- You may have liability for your spouse's pre marital debt in Louisiana.
Table of Contents
In Louisiana, community life extends beyond the surface into shared finances. If you're married and living in the Bayou State, you might be surprised to learn that your spouse's debts could become a shared chapter in your financial story.
This article unpacks the nuances of Louisiana's community property laws and the doctrine of necessaries. It guides you through the intricate dance of determining debt responsibility between spouses.
Read on to make sure that your financial journey together is smooth.
Learn if You Must Pay Your Spouse's Debts in Louisiana
Louisiana is one of 10 community property states (LA Civ Code 2338). You may have liability for your spouse’s debt even if you knew nothing about it. A separate law called the doctrine of necessaries may obligate you to pay your spouse’s debt in Louisiana. If you are married and reside in Louisiana, you must learn if you have liability for your spouse’s debts.
This focuses on a spouse’s debt liability, but there’s much more to Louisiana’s community property law than this article. See the Louisiana Bar’s Community Property (PDF) brochure and the attorney general’s Louisiana Laws on Community Property and Covenant Marriage to learn how Louisiana law handles divorce, property rights, and credit applications.
|Community Property States
Community Property at a Glance
In community property states like Louisiana, the presumption is wealth or debt created during the marriage is part of the marital community (LA Civ Code 2341.1). Therefore, courts in community property states assume a debt incurred from the date of marriage to the date of divorce is a community debt that is to be divided equally between the spouses (LA Civ Code 2361).
Many courts in community property states assume the rents, profits, and issues of separate property remain separate. The fruits of community property are community assets. If a spouse claims a certain property is separate, it is up to that spouse to prove the property was acquired with separate funds or separate credit.
By contrast, separate property is property acquired before marriage, and property acquired by a spouse during marriage through gift, inheritance, or an award for personal injury damages.
Louisiana Law & Community Property
In Louisiana, a debt incurred by a spouse is either a community debt or a separate debt (LA Civ Code 2359). If incurred for the common interest of the spouses or for the interest of the other spouse, it is a community debt (LA Civ Code 2360). A separate debt of a spouse can be satisfied from that spouse's separate property and the community property (LA Civ Code 2345).
By contrast, a community debt can be satisfied from the community property and from the separate property of the spouse who incurred the same. If both spouses received a benefit from the debt, it can be collected from the separate property of both spouses as well as the community property. If separate property is used to satisfy a community debt or vice versa, the spouse owning the separate property, or the community if vice versa, may be entitled to reimbursement (LA Civ Code 2358, 2364 and 2365).
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Louisiana Pre-Marital Debt
Bills.com cannot find case law on this subject. Secondary sources indicate that LA Civ Code 2345 ("A separate or community obligation may be satisfied during the community property regime from community property and from the separate property of the spouse who incurred the obligation.") applies to a spouse's pre-marital debt.
Consult with a Louisiana lawyer who has family law experience to learn more about Louisiana community property law. If you cannot afford a lawyer, contact Louisiana Law Help or another Louisiana pro bono program to find low- and no-cost legal services.
|Louisiana Community Property Law at a Glance
|Husband or wife liable for debts of other incurred before marriage?
|*Community property is available to judgment-creditors and IRS.
|Husband or wife liable for debts of other incurred during marriage?
|** "Whoever has bound himself personally, is obliged to fulfill his engagements out of all his property, movable and immovable, present and future." However, a spouse's separate property is not available to judgment-creditors.
|When do spouses become subject to state community property laws?
|When the spouses are married and domicile in the state.
|Does the state recognize common law marriage?
|No, but it recognizes a common law marriage legally established elsewhere.
|Does the state recognize some from of domestic partnership as an alternative to marriage?
|Does a domestic partnership under state law create community property rights and obligations?
|When does the community property regime terminate (causing subsequently acquired assets or future income to no longer be characterized as community property)?
|Change of domicile, death or entry of a judgment of separation of property or judgment of divorce.
|How is post marital income generated from separate property (e.g., rents, dividends, interest) characterized?
|How does the state characterize appreciation in the value of separate property?
|Separate property. If a spouse's labor or community property funds are used to acquire or improve the asset, a right to reimbursement exists, but this does not change the character of the asset.
|How does the state characterize property taken by spouses under a deed reflecting that the property is held in joint tenancy?
|How does the state characterize property taken by spouses under a deed reflecting that the property is held in tenancy in common?
|Does a deed taken in the name of one spouse as sole and separate property create separate property?
|No. Title does not determine the character of the property. It is rebuttably presumed to be community property.
|Does the state recognize pre or post marital property characterization agreements?
|What are the property characterization agreements called?
|Matrimonial agreements. (but, post marital agreements require court approval).
|Are property characterizations agreements required to be in writing?
|Agreements must be in writing.
|Are property characterization agreements valid against creditors?
|Yes, but only if the agreement is recorded (As to real property, with parish registry where real property is located, and as to personal property, with parish registry where spouses domicile).
|What property is available to satisfy a premarital federal tax obligation assessed against only one spouse?
|100% of all community property and all separate property of liable spouse.
|What property is available to satisfy a post marital federal tax obligation assessed against only one spouse?
|100% of all community property and all separate property of liable spouse.
|Louisiana Community Property law: Louisiana * LA Civ Code 2363 ** LA Civ Code 2345 and 3182 and 2357
Louisiana Community Property Law. Source: IRS and Bills.com
Louisiana Doctrine of Necessaries
Louisiana residents who deal with a spousal debt question must know community property law and the doctrine of necessaries to understand their liability for a spouse’s debt. Louisiana’s doctrine of necessaries law is not part of community property law, but it may be very important to you.
The doctrine of necessaries is a law giving creditors a right to collect a certain type of debt from a debtor’s spouse or the parent of a minor child. Some states repealed their doctrine of necessaries laws. Louisiana has not (LA Civ Code 2372). To learn more about Louisiana’s doctrine of necessaries rule, read the Bills.com article Doctrine of Necessaries Rules For All States.
Did you know?
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Collection and delinquency rates vary by state. For example, in Virginia, 16% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 4%.
While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.