Avoiding debt belonging to your spouse before marriage.
Under Arizona law (ARS 25-215) community property, including the earnings of a spouse, can be used to satisfy the other spouse’s premarital debts “to the extent of the value of that spouse’s contribution to the community property which would have been such spouse’s separate property if single.”
In a recent Arizona Court of Appeals Case, SPQR Venture Inc. v. Robertson, 1 CA-CV 14-0341, 5/12/15, the court refined what is meant by “spouse’s contribution”. The spouse in question was unemployed and had no income. However, the resourceful creditor argued that a non-working spouse still makes a substantial contribution to the community in the form of services. The idea was to place a value on these services and use this value to reach the earnings of the working spouse.
The Court of Appeals rejected this argument and ruled that where a debtor-spouse earns no income, a creditor may not collect from the working spouse’s earnings. Nor may a creditor collect the value of the debtor-spouse’s nonfinancial contributions to the community from the working spouse’s earnings.
A pre-nuptial agreement would also have been of help to these spouses.
To learn more about avoiding debt belonging to a spouse prior to marriage, contact our office at 602.277.4441 to speak with an experienced attorney.