SPOUSAL LIABILITY FOR DEBTS INCURRED DURING MARRIAGE
There is a common misconception that there are "community debts" or "community liabilities." These concerns occur most frequently when parties to a divorce are trying to determine whether the husband or wife should be responsible for a debt incurred during the marriage. The general rule in Texas is that liability follows management. Spouses can have direct and indirect legal responsibility for debts or liabilities. Direct responsibility occurs when a spouse signs an instrument or contract obligating himself or herself. A common example would be an application for credit or a mortgage on a house.
Indirect liability is based on agency principles and the doctrine of "necessaries." Under the Texas Family Code, a person is personally liable for the acts of the person's spouse only if: (1) the spouse acts as an agent for the person; or (2) the spouse incurs a debt for necessaries. A spouse does not act as an agent for the other spouse solely because of the marriage relationship. The doctrine of necessaries was a part of the common law of the State of Texas, and is now set out in the Texas Family Code as follows: "Each spouse has the duty to support the other spouse. Each parent has the duty to support his or her child during the period that the child is a minor, and thereafter as long as the child is fully enrolled in an accredited secondary school in a program leading toward a high school diploma until the end of the school year in which the child graduates. A spouse or a parent who fails to discharge the duty of support is liable to any person who provides necessaries to those to whom support is owed."
What is "necessary" varies from case to case, and is dependent upon one's station in life. At a minimum, necessaries include food, clothing, shelter, and non-elective medical care. Your attorney should be able to formulate arguments as to what is "necessary" in order to best serve you within the parameters of the law.
What property can be taken to satisfy a debt depends on the management rights of that property. With the exception of homestead property, each spouse has the sole management, control, and disposition of: 1) his or her separate property; and 2) the community property that he or she would have owned if single (personal earnings; revenue from separate property; recoveries from personal injuries; etc.). All other community property is subject to the joint management, control, and disposition of the husband and wife, unless the spouses provide otherwise by power of attorney in writing or other agreement. Generally, the only property that is subject to seizure for a spouse's liabilities is property over which that spouse has some right of management or control. Injuries or damage to property by one spouse committed during marriage, however, are treated differently. Consult an attorney for more information.
The rules of marital property liability are as follows: 1. A spouse's separate property is not subject to the liabilities of the other spouse unless both spouses are liable by other rules of law. Again, an example would be when both spouses sign a contract or loan application. 2. Unless the incurring spouse is acting as an agent or is incurring a debt for necessaries, the community property subject to a spouse's sole management, control, and disposition is not subject to: a) any liabilities that the other spouse incurred before marriage; or b) any nontortious liabilities that the other spouse incurs during marriage. 3. The community property subject to a spouse's sole or joint management, control, and disposition is subject to the liabilities incurred by him or her before or during the marriage. 4. All community property is subject to the tortious liability of either spouse incurred during marriage.
For a more detailed and specific explanation of spousal liability, contact Tom Skowronek to schedule a meeting.