Prior to marriage, it is not uncommon for people to incur debts or obligations to their significant others. For example, in a long term relationship a boyfriend might loan his girlfriend money for a down payment on a new car or money for car repairs. If the couple cohabitates, the couple might have an agreement that the girlfriend will pay all of the household expenses while her boyfriend attends school full time. In another common scenario, a couple agrees that one of the parties will lend the other money for tuition. Significant others can also incur debts to each other by one party providing professional services to the other such as legal or tax preparation assistance. As long as an agreement exists for repayment (either orally or in writing) and other contract requirements are met, the parties have entered into an enforceable contract.
What happens to a debt or obligation between significant others if the parties get married? During marriage all earnings, accumulations, and liabilities acquired by either party during marriage are community property. However, in general, all property (and liabilities) acquired prior to marriage is the separate property of the acquiring spouse. A pre-marriage debt owed by one spouse to the other is by default a separate property receivable for one spouse and a separate property obligation of the other. According to California statues and case law, a pre-marriage debt between spouses is not extinguished by marriage. This means that after separation, the lending spouse may collect the debt from his or her spouse.
Even if a pre-marriage debt between spouses survives marriage, what happens if the marriage lasts longer than the statute of limitations on collections? In civil cases, a lender generally has a limited period of time to collect money owed to him or her from a debtor. Typically, statutes of limitations range from two to three years depending on the particular cause of action. Because a significant number of marriages last longer than two to three years, the statute of limitations on collection of a pre-marriage debt may expire before the parties seek a divorce. However, California courts have carved out specific rules regarding debts owed between people who get married. In California, the statute of limitations on debt collection is tolled (is put on pause) from the date a lender and debtor get married through the date of separation.
There is an important distinction in this area of law between couples who are married and couples who merely cohabitate. Because California does not recognize any form of common law marriage, couples must legally marry to toll any pending statutes of limitations on debt collections. If a couple cohabitates, all standard statute of limitations will still apply.
Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.