Can a Spouse Be Held Liable for Credit Card Debt in Arizona
Many people ask can a spouse be held liable for credit card debt in Arizona. Both spouses are equally liable for credit card debt incurred during the marriage regardless of whose name is on those credit cards and regardless of whether the other spouse was even aware of the credit card debt.
These debts are considered community property debts and both spouses are equally liable for those credit card debts.
Several exceptions, however, apply to this general rule such as when the parties had a prenuptial agreement stating otherwise and a notice of the existence of that prenuptial agreement was recorded with the county recorder’s office before the debts were incurred. This would eliminate a spouse’s liability for his or her spouse’s credit card debt.
Another exception to a spouse’s liability for credit card debt is if one spouse can establish the spending on credit cards constitute waste, which means the spending was not done for the benefit of the community, such as excessive gambling.
Lastly, any debts, including credit card debts, incurred prior to marriage or after the service of the Petition for Dissolution of Marriage or service of the Petition for Legal Separation will, generally, be the sole and separate obligation incurring the obligation.
An exception to this rule exists if the charges on the credit cards after service of the initial divorce or legal separation were on purchases used to preserve a community property asset.
Liability of a Spouse for Credit Card Debt in Arizona
The Arizona Court of Appeals recently reaffirmed a limit on creditors seeking collection of a premarital debt from the marital community.
In SPQR Venture, Inc., v. Robertson, No. 1 CA-CV 14-0341 (App. 2015), Wife incurred debt during a prior marriage.
The judgment against the Wife was renewed several times.
After Wife remarried, the creditor came calling, urging that the premarital debt could be collected against the community property of Wife and new Husband.
Upon remarriage, the Wife became a stay-at-home mother, caring for her five children.
The husband provided the sole household income.
The creditor argued that because Wife had foregone her previous employment to fulfill her current role in the new marital community, Wife made a contribution to the community the monetary equivalent of which could then be drawn from community income to satisfy her premarital debt.
Creditor relied on Arizona Revised Statutes §25-215. Section 25-215, “Liability of community property and separate property for the community and separate debts,” states in pertinent part:
B. The community property is liable for the premarital separate debts or other liabilities of a spouse, incurred after September 1, 1973, but only to the extent of the value of that spouse’s contribution to the community property which would have been such spouse’s separate property if single.
Creditor focused on the words “to the extent of the value of that spouse’s contributions to the community property” to advance its effort.
It argued that the Wife provided a quantifiable if non-financial, the value that should open the marital community income to a collection.
Wife and Husband argued that Creditor ignored the balance of the statute that provides that the community is liable “only to the extent” a financial contribution “would have been such spouse’s separate property if single.”
The trial court agreed with Wife and Husband, as did the Court of Appeals.
The Court of Appeals found no authority permitting a collection against the income of a non-debtor spouse for the “value” of a debtor’s nonfinancial services to the community.
In other words, A.R.S. §25-215(B) precludes the assignment of a non-debtor spouse’s income or wages to satisfy a separate premarital debt of the other spouse.
Thus, the Husband was protected against liability for Wife’s premarital debt, even when it was uncontested that Wife provided a service to her family that had value and for which the community would otherwise need to pay.
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Common Questions About This Article
Is a Wife Responsible for Her Husband’s Debts?
Unless you have a prenuptial agreement stating otherwise, debts incurred during marriage for the benefit of either or both of the spouses are considered to be community debt. A judge will typically divide a community debt equally between the spouses. This would mean a wife is responsible for her husband’s debts in Arizona.
There are exceptions to this rule, such as when a spouse incurs a debt related to his or her sole and separate asset in which case the wife would not be responsible for her husband’s debts incurred for the benefit of his sole and separate property.
If you have questions about if a spouse can be held liable for credit card debt in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona community property and family law attorneys have over 100 years of combined experience successfully representing clients in community property and family law cases.
Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.
Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your community property or family law case around today.
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Chris Hildebrand wrote the information on this page about can a spouse be held liable for credit card debt in Arizona to ensure everyone has access to information about community property laws in Arizona. Chris is a family law attorney at Hildebrand Law, PC. He has over 24 years of Arizona family law experience and has received multiple awards, including US News and World Report “Top Arizona Divorce Attorneys”, Phoenix Magazine “Top Divorce Law Firms”, and Arizona Foothills Magazine “Best of the Valley” award. He believes the policies and procedures he uses to get his clients through a divorce should all be guided by the principles of honesty, integrity, and actually caring about what his clients are going through.