As you may have realized already in reading this blog, in Family Court in Utah, both parties are liable for the debts of the other party if the debt was incurred during marriage and is not a student loan. In other words, all marital debt will be added up, regardless of who incurred the debt, and each party will be allotted 1/2 of the full amount in a divorce. Assets and other payments can be used to off-set this amount but the principal is the same. One Half Each. There are arguments to fight this but it is generally true.
But that only deals with the idea of what one spouse owes the other spouse in a divorce. Utah Legislators have taken it a big step further by allowing the Creditors themselves to sue you for your Ex-spouses contracts and agreements. And if they cannot get it from one spouse, they can get the FULL amount from the other, even if you didn’t sign a thing.
Senate Bill 269 “Family Expenses Amendments” has passed the 2015 General Session and will become law.
The amended bill reads as follows:
Utah Code Annotated Section 30-2-9. Family expenses — Joint and several liability.
(1) The expenses of the family and the education of the children are chargeable upon the property of both spouses or of either of them separately, for which expenses they may be sued jointly or separately.
(2) For the expenses described in Subsection (1), where there is a written agreement signed by either spouse that allows for the recovery of agreed upon amounts, a creditor or an assignee or successor in interest of the creditor is entitled to recover the contractually allowed amounts against both spouses, jointly and severally.
(3) Subsection (2) applies to all contracts and agreements under this section entered into by either spouse during the time the parties are married and living together.
(4) For the purposes of this section, family expenses are considered expenses incurred that benefit and promote the family unit. Items purchased pursuant to a written contract or agreement during the marriage that do not relate to family expenses are not covered by this section.
(5) The provisions of Subsections (2) and (3) do not create a right to attorney’s fees or collection fees as to the nonsigning spouse for the purchases of: (a) food or clothing, or (b) home improvements or repairs over $5,000.
This means, even if you did not sign for the expenses and you do not appear on any written contract but:
1. The agreement regarding the expense was entered into by EITHER spouse during marriage and while you and your ex-spouse were residing together
2. The expense was one did “benefit and promote the family unit”
Then the creditor can sue either spouse to recover the entire amount owed.
This bill may solve the problem of spouses arguing about whether they “knew about the bill” because it appears that actual disclosure of the agreement or contract is not needed. Ignorance is not bliss- you will be liable. Also, it allows the creditor to move directly against the spouse without waiting for the parties to “duke it out” in a divorce proceeding. Notably, you are severally liable- meaning that if the creditor cannot get the spouse who made the agreement or contract to pay, the creditor can sue you for the entire amount of the bill.
But other questions and problems are created by the language. What if the agreement was entered into prior to marriage but the parties then married and the contracting spouse never paid or discloses the agreement? What expenses are ones that “benefit and promote the family unit”- piano lessons, a new roof, credit card bills on many mixed various items, the dog’s medical bills, therapy for your Ex-Spouse? What if you feel that this therapy resulted in your Ex-spouse filing for divorce?
Section (5) is where things really get complicated. “(5) The provisions of Subsections (2) and (3) do not create a right to attorney’s fees or collection fees as to the nonsigning spouse for the purchases of: (a) food or clothing, or (b) home improvements or repairs over $5,000.”
So if your Ex-spouse signed a contract for home repairs of $3,000 and that spouse never paid the bill, you are liable to the creditor for attorneys fees and collections fees but if your Ex-spouse signed a contract for home repairs of $5,001.00, then you are not liable for attorneys fees and collection fees? Then, I hope your Ex really splurged, because that could save you a ton!