Do the Rules Regarding Community and Separate Property Apply to Debts in Arizona?
How Are Debts Between Spouses Decided in Arizona
Yes, the rules are the same. For example, any debt owed by either spouse before marriage remains that spouse’s sole and separate debt. Debts incurred after service of the divorce petition are the separate debt of the spouse incurring the debt.
There are many exceptions to these general rules.
Sometimes complex issues arise when a creditor of one spouse attempts to collect a separate debt of a spouse by taking the separate property of the other spouse or the community property of both spouses.
The Arizona Supreme Court addressed the limits of a creditor in taking community assets or the separate property of the non-debt owing spouse to satisfy a premarital debt in the case of Forsythe v. Paschal.
You should also read our in-depth article on the Arizona Court of Appeals decision in the SPQR v. Robertson case, or you may watch the video above about that case.
There are situations when one spouse owes a debt to the other spouse when, for example, a spouse loans the other spouse money from a separate property account.
The Arizona Court of Appeals in the case of Johnson v Johnson held the divorce court is not authorized by any laws in Arizona to address loans between spouses.
A separate civil lawsuit would have to be filed by one spouse against the other to collect upon any such personal loans between the spouses.
Is a Spouse’s Separate Property Liable for Community Debts
The Arizona Court of Appeals in the case of Union Bank v. Pfeffer held that a creditor might come after community assets but usually cannot come after the separate property of a spouse to pay a community debt.
The exception to this general rule would occur if both spouses signed, for example, a promissory note to a creditor.
In that situation, both the community and each spouse’s separate property could be taken by a creditor as they are binding both themselves and their community to the obligation.
Other Articles About Community Property in Arizona
- Community Lien on Sole and Separate Property in Arizona
- Community Liens Separate Property in Arizona
- Community Property and Personal Guaranty in Arizona
- Determining Community Versus Sole Property in Arizona
- The difference Between Community and Separate Property in Arizona
- Disclaimer Deed in a Divorce in Arizona
- Divide Retirement Accounts in an Arizona Divorce
- Dividing Property Not Included in Divorce Decree in Arizona
- Division of Debt in an Arizona Divorce
- Enforce Division of Property and Debt in an Arizona Divorce
- Enforcing a Property Settlement Agreement in Arizona
- Filing a Lis Pendens in a Divorce in Arizona
- How is Property Divided in a Divorce in Arizona
- How to Divide Property in Arizona When a Spouse is Hiding Assets
- Is All Property Community Property in Arizona
- Is Arizona a 50 50 State in a Divorce
- Is Separate Property Divided in Arizona Divorce
- Marital Property Laws in Arizona
- Military Retirement Pay and Divorce in Arizona
- Pensions and Divorce in Arizona
- Separate Property Used to Purchase a Home During Marriage in Arizona
- Sole and Separate Property Divorce Arizona
- Is a Spouse Liable for Credit Card Debt in Arizona
- Stock Options Divided in an Arizona Divorce Case
- Stock Options in an Arizona Divorce
- Unequal Division of Property in Arizona Divorce
- Unfair Separation Agreement in Arizona
- Valuation and Distribution Options For Pensions in an Arizona Divorce
- What is Community Property in Arizona
- What is Separate Property in Arizona
Chris Hildebrand wrote this article about the division of debts in an Arizona divorce 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.