Payment of Debts after Divorce

In general, the debts of a divorced spouse may be paid off as agreed upon by the spouses. Where they fail to reach an agreement on the payment of their debts, their disputes must be settled according to their divorce agreement or a court decree, order, or consent decree, or other legal documents.
 
Debts before Marriage
Where a debt of husband or wife was borrowed before their marriage, such a debt is their personal debt rather than a community debt, and shall be paid off with the property of the obligor after their divorce. Where the obligee claims payment of the debt by the other spouse, such a claim will not be sustained by the court.
But if the obligee adduces evidence to prove the money borrowed from his was used for the family life of the obligor, for example, it is agreed in the loan agreement that the money borrowed will be used to purchase a house for the family, the debt constitutes a community debt and should be paid off by both the spouses.
In practice, it is difficult and even impossible to adduce such evidence. Where the obligor denies that the money borrowed was used for their family life, the obligee may request the obligor to adduce evidence to the contrary, i.e., evidence to prove that the borrowed money was used for other purposes.
 
Fabricated Debts
If, during their marriage, a spouse fabricates a debt by colluding with a third party, and the third party claims payment of the debt by the spouses as their community debt, the court will not sustain such a claim as it is invalid and illegal.
In such a case, the other spouse may hold the spouse and the third party that fabricated the debt criminally liable if such fabricated debt is of a large amount.
 
Illegal Debts
Where a spouse incurs a debt in engaging in illegal activities, such as gambling, drug dealing, drug use, etc., such a debt is invalid and illegal. Where the obligee claims payment of such a debt by either spouse or both spouses, the court will not sustain the claim.
In such a case, the spouse incurring such a debt may be subject to administrative or even criminal penalties.
 
Debts after Property Division
Where the property of spouses have been divided and disposed of according to their divorce agreement or a court decree, order, or consent order, or other legal documents that have taken effect, but a community debt owed to a third party has not been paid off, such third party shall still have the right to claim payment of the community debt by both the spouses.
In such a case, both the spouses are jointly and severally liable to the community debt.
 
Recovery after Payment of a Community Debt
Where a spouse paid off a community debt during their marriage or after their divorce, he/she is entitled to claim recovery of amount which should have been paid by the other spouse under their divorce agreement or a court decree, order, or consent order, or other legal documents that have taken effect. And such a claim will be sustained by the court in a case filed after their divorce.
 
Debts after the Death of a Spouse
Where husband or wife dies during their marriage, their community debts incurred during their marriage should be paid off by the surviving spouse with their community property.
Where husband and wife agree that the properties obtained during their marriage shall be individually owned and the personal debts of either spouse shall be paid off by such spouse with his/her personal property, the personal property of such spouse, after his/her death, should be paid off with his personal property unless the obligee was unaware of the agreement between the spouses. Where the surviving spouse alleges that the obligee was aware of the agreement, he/she has should bear the burden to adduce evidence to prove the fact that the obligee was aware of the agreement.