Within the framework of the family laws a person has a fundamental responsibility for the debts of his/her spouse which were accumulated during the course of the marriage or the cohabitation, apart from various execeptions. However, in this context, a distinction should be made between the responsibility for the debts as determined within the framework of the internal relationship between the spouses and the responsibility for the debts vis-à-vis the creditor.
1. Debts Between Spouses
Sharing Of Debts According To The Property Sharing Rule
It was held in case law that as a consequence of the presumption of a general partnership in assets (see the section dealing with the property sharing rule), there is also a presumption of a parallel partnership in the debts accumulated during the ordinary course of the partnership or during the normal married life for the purpose of family property or for the purpose of ongoing expenses of the family. This also holds true for a business debt, since, just as the profit from the business conducted in a joint effort is shared, the liabilities of the spouse for that same joint effort are also shared. Furthermore, it was held that for the purpose of calculating the value of joint property, general debts would also be taken into account, even if they do not necessarily relate to a particular property, namely, that there is a partnership both in respect of the “good” and the “bad”.
The aforesaid in respect of sharing debts does not apply in exceptional cases as defined in the case law, however the burden of proof rests with the party claiming that exclusion. Thus, for instance, debts of a personal nature which are not related to the joint lifestyle of the family are excluded; debts created as a result of the violation of a fidelity duty vis-à-vis the spouse such as a husband’s expenses for maintaining a mistress or expenses related to separate private property; debts created as a result of an offense of either of the spouses and payment of fines in respect of such offenses; debts created in consequence of expenses that would not normally be expenses from the couple’s account.
The Liability For Debts According To The Balancing Of Resources Arrangement
Pursuant to the Property Relations Between Spouses Law, 1973, in the course of the marriage there exists a property separation between the spouses, while the balancing of resources between them is implemented upon the termination of the marriage and within its framework an assessment of the couple’s assets is made less the debts accumulated by them. Hence, it is only on the date of the termination of the marriage, upon the balancing of resources that the amount of the spouse’s debts is deducted form his/her rights (see also “Property Relation Between Spouses Law”).
Within the framework of the balancing of resources, debts in connection with assets that are not subject to balancing of resources – as provided in the Property Relations Law (such as assets received as a gift or inheritance or assets accumulated by one of the spouses prior to the marriage – see The Property Relations Between Spouses Law), should not be included. Case law further holds in this context that a personal debt should not be deducted from the total assets of the balancing, namely, a debt which has no connection to any asset which is subject to balancing and does not also fall within a debt created in connection with the management of the domestic life for the maintenance and normal way of life of the family.
2. Debts Between The Debtor’s Spouse And The Creditor
Property Sharing Rule
A recent supreme court decision sets the rules according to which a spouse shall have direct liability to the other spouse debts accumulated during the marriage. The supreme court examined the date of the creation of the debts, and the marital situation of the spouses at the time, the character of the debts etc’. It seems that in this issue each case has to be examined on its merits.
The Arrangement of Balancing of Resources
It was held in case law that even where the issue is a significant personal debt taken by the spouse, the fact that the asset from which the creditor wishes to collect the debt is registered in the name of the debtor spouse only prevents the other spouse from receiving relief in the relationship with the creditor. This is in view of the fact that the right to balancing of resources, only consolidates upon the termination of the marriage. At the same time, it was held that where a spouse who is subject to a regime of balancing of resources applies to share a property on the basis of sharing a specific property, such spouse will also be liable for the other spouse’s debts in connection with said property.