Court redefines debt in divorces

For years, debt has been jointly paid off by divorcing couples regardless of who accrued it. Now, the top court has said husbands and wives should not have to pay for their partner’s excesses.

The Supreme People’s Court issued a judicial interpretation on the Marriage Law on Wednesday, clarifying the division of debt.

“In the past, many people were forced to pay off their spousal debt that was borrowed without their knowledge, which sounds unfair,” said Xia Yinlan, a law professor at the China University of Political Science and Law. “It was also hard for those without any idea about the debt to prove they knew nothing about the loan.”

Li Xiuping faced such a situation. She was divorced in November 2014, but about six months later she was named as a defendant in a case involving a personal debt of 2.8 million yuan ($435,000) accrued by her ex-husband.

She said she knew nothing about the debt but was still expected to help pay it back.

“Now concerns like Li’s can be solved, as the top court document on Wednesday defines what ‘joint debt’ is and made clearer who should be the evidence provider if a debt dispute happens,” Xia said.

“Joint debt” is defined as that built up during a marriage to cover family expenses like food, clothing and medical care.

Husbands and wives can now argue they should be exempt from repaying debts they had no knowledge of during the marriage under the interpretation, but they need to prove the money was not used for family expenses.

A loan taken out for nonfamily expenses will not automatically be defined as joint debt, but if a lender says a couple should share responsibility, they must prove the debt was for daily expenses.

“Maybe it sounds difficult for lenders to collect evidence, but they can find materials, such as house purchase documents with signatures of husbands or wives, and give it to a court to prove the money is used for family expenses, or that both spouses knew about the debt during the marriage,” said Zhang Wei, a Beijing lawyer handling divorce cases.

If a husband or wife takes a loan from a bank, it may be harder for one spouse to escape the debt “because banks have strict loan application procedures that demand signatures of both husband and wife”, he said, adding that disputes often occur when one partner has borrowed money from a friend, relative or loan shark.