Not Married But Jointly Liable For Debts?

12 Aug Not Married But Jointly Liable For Debts?

The collector claims she’ll sue me for my deceased companion’s debts because California is a community property state, my client reported. Does living together without marriage makes me liable for the debts?

The collector threatened to open a probate proceeding to overturn the sale of the house we had owned in joint tenancy, she continued.

So many violations of the Fair Debt Collection Practices Act, where do I begin?

Let’s start with community property in California: The community property system makes all community property liable for the debts either spouse incurred during marriage. It does not make one spouse personally liable for a debt incurred by the other spouse.

What’s the difference? When an individual is personally liable, a creditor can reach the couple’s community property and the individual’s separate property. Personal liability survives the end of the marriage; the liability of the community is fixed when the community ends with the death of a spouse (or at divorce).

Thus, when one spouse dies, the community property that the couple has accumulated is liable for a community debt incurred by the deceased spouse, but the survivor’s earnings and acquisitions after the death of the spouse are not liable for the deceased spouse’s debt.

Those accumulations after the marriage ends are not community property.

Community Property Limited to Marriage

In my client’s case, the first misrepresentation by the collector was that an unmarried couple has community property. Community property arises only by reason of marriage. California does not recognize common law marriage. So, my client never acquired community property by reason of living with her significant other.

No Personal Liability

The second misrepresentation was that the community property system made the survivor personally liable for someone else’s debts. My client had no part in the debt in question, so she had no liability to pay the debt.

Joint Tenancy in California

Then there is the utter falsehood about joint tenancy and probate. Joint tenancy is a form of joint ownership where a person’s interest in property passes automatically at their death to the surviving joint tenant. Because the property interest passes by reason of the form of title, no probate is necessary. In fact, because joint tenancy bypasses probate, it is a favorite way to hold title.

California law is clear that property that the surviving joint tenant acquires at the death of a co owner comes to the survivor free of the debts of the owner who has died.

Even if there was a judgment lien on the interest of the decedent, that lien dies with the judgment debtor and the property comes to the survivor without obligation to the creditors of the decedent.

The Takeaway

So, what do you learn from my client’s experience beyond the little lesson in California law?

I suggest: 1) collectors will say anything to push you into paying even debts that aren’t yours; and 2) do not get your legal advice from anyone trying to get money from you.

Then, consider getting legal advice to enforce your rights under the Fair Debt Collection Practices Act and Califonia’s Rosenthal Act. Our only hope at eradicating no-lie-is-too-egregious collection practices is to make them too expensive for the collection industry.

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Cathy Moran, Esq.

I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.
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