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Is Debt Community Property in California?

Have you attempted to collect a judgment against an individual to no success? One option is to consider the means of the spouse. California is a community property state, meaning the community property of a debtor's spouse or domestic partner may be available to satisfy a judgment. Indeed, California law clearly states that the community property interests of the debtor and non-debtor spouse are generally liable for debts incurred by either spouse either before or during the marriage and prior to separation, whether the debt is based on contract or tort. California Family Code §§902, 910; Litke O'Farrell LLC v. Tipton (2012) 204 Cal. App. 4th 1178, 1181-82.

Collecting a judgment against a tortfeasor

In California, not all debts are considered equal. For example, with respect to a debt that is the result of a tort of the spouse, if the tort (a wrongful act leading to civil legal liability) was not the result of an activity undertaken by the tortfeasor for the benefit of the community, then community property may be taken only if the separate property of the tortfeasor spouse is insufficient to pay the obligation. On the other hand, if the tort was the result of an activity undertaken on behalf of the community, then the creditor must first satisfy the debt by applying community Thumbnail image for 1439338936_Money_Bag.pngproperty before looking to the separate property of the tortfeasor. See, California Family Code §1000(b).

However, simply because a creditor has the right to look to community property does not mean that the creditor has the right to name the spouse in the lawsuit.  In fact, it is improper to add the non-debtor spouse as a defendant if only the community will be held liable for the debt (i.e., the spouse did not sign the contract or was not a tortfeasor). Oyakawa v. Gillette (1992) 8 Cal. App. 4th 628, 631-32.

For more information on how to collect a judgment against a debtor's spouse, contact experienced Los Angeles commercial collections attorney Ronald P. Slates today.

 

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