Joint Liabilities, California

[prometheus399]

My wife is currently exploring the possibility of acquiring a business or starting a successor business after her current employer closes later next year. To this end she is considering taking out a substantial bank loan, signing a lease for office space, and signing contracts with customers.

I am not going to co-sign on any liability but I am concerned that under family law I might ultimately be held liable for some or all of the financial obligations she incurs.

Under California law are the liabilities she incurs while we are married considered joint? IOW, upon disolution of the marriage we must divide the assets acquired during the marriage, do we also divide liabilities?

If so, is there any action I can take either before or after she signs that will limit my liability?

 

[prometheus399]

I thought this would be a pretty simple question but apparently not. I cannot find anything that addresses the issue.

Under California law what are the consequences of one spouse incurring liabilties and then not being able to meet her obligation under them?

For example, if the couple own $500K of joint property and then one spouse has a judgement against her related to unpaid business debt of $600K, can the creditors move against the entire $500K or are they limited to the $250 (the debtor spouse's share of the community property).

Is there any way for the non-debtor spouse to protect himself from debts incurred by his spouse? For example, filing a restraining order against the pledging of personal property or making a public disclaimer of responsibility for liabilities incurred by his wife? Even if the nondebtor spouse files for divorce, will this be sufficient to shield him from liabilities incurred by his spouse?

Are there any general rules on how this situation is viewed by the courts?

 

[garykittrell68]

California is simple......Debt incured during mariage belongs to both of you. Just as you devide assets, you devide Debt. However their is some laws relating to owning a business, and the encumberence involved. Go to findlaw.com and look for your self.