California Debt Liability when Spouses Separate

As a general matter, the Rosenthal Fair Debt Collection Act (RFDCPA) and other consumer acts in California treat the debt of separated spouses the same as when they were together. In reality, however, the practical differences are extensive. Under the California civil code, the earnings of both the husband and wife are taken into account when the debt is distributed.

The two debt-specific statutes which apply when spouses separate are the Fair Debt Collection Practices Act (FDCPA) and the RFDCPA. The FDCPA is a federal act passed in 1977 to establish fair debt collection practices. The RFDCPA is a California state statute, also adopted in 1977, which regulates the conduct of debt collectors in the state and prohibits California debt collector harassment.

While the FDCPA applies only to secondary debt collectors, the RFDCPA also extends to original creditors seeking to collect a debt. The RFDCPA, along with several California family law statutes, governs the distribution of debts when spouses divorce or separate. Ideally, the separating spouses will settle the division of property and debts on their own. If they cannot reach an agreement, however, California family law and the RFDCPA then come into play and govern debt liability. 

According to California law, the debts a couple incurs while they are married, but prior to separation, are a part of their community property – meaning that both spouses are liable. This is true regardless of whether the debt was incurred for the benefit of the family as a whole, or for one spouse’s personal use. It is also irrelevant whether the debt was incurred in the name of both, or a single spouse: the name on the bill or credit card statement does not change the fact that both the spouses are equally liable.

Thus, many separating spouses choose to divide the marital debt equally. Modifications to this general rule can then be made. For example, one spouse can take a larger share of the marital property in exchange for assuming a larger share of the marital debt.

Unfortunately, many separated spouses are still subjected to harassment by debt collectors after a separation. This can be distressing, especially at a traumatic time such as a marital separation. Because, absent a court order, both spouses are liable for marital debts, creditors often continue to call one spouse even after being informed that the other spouse was assigned responsibility for the debt.

A separated spouse does not, however, lose the protections of the FDCPA and RFDCPA. A separated spouse, like other consumers, has the right to be free from harassing debt collection calls and to instruct a collector to stop calling. If you are receiving harassing debt collection calls after your separation, an experienced debt collection attorney can help you to put a stop to the harassment and even obtain compensation.