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In China, your spouse’s secret debts can no longer drag you down

Husbands and wives will be held responsible for partners’ borrowing only if they signed initial paperwork or gave formal consent

PUBLISHED : Wednesday, 17 January, 2018, 8:16pm
UPDATED : Thursday, 18 January, 2018, 7:53am

Chinese spouses will from Thursday no longer be held accountable for unreasonable debts racked up by their partners, after lawmakers redefined the concept of marital joint liability.

In a revision to Article 24 – a document that helps courts interpret the Marriage Law – the Supreme People’s Court said on Wednesday that debts will be considered shared liabilities only if both partners sign the original paperwork, or if a non-signatory later approves the borrowing.

The change does not apply to spending or borrowing considered reasonable in a marriage, such as payments made for shelter or food, the court said.

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Speaking at a press conference, Supreme Court judge Cheng Xinwen said the update to the article was intended to reflect a changing society.

It was considered necessary in view of the rising number of cases of people finding themselves in financial difficulty because of their spouses’ clandestine borrowing, he said.

The previous version of the article stated that all debts incurred in a marriage were the joint liability of both partners.

Lu Xiaoquan, a lawyer with the Beijing-based Qianqian Law Firm, welcomed the revision, saying it shifted the balance of legal protection in favour of the victims of marital debt and away from their creditors.

“I’m definitely in favour of the new interpretation because of the values behind it,” he said. “I see no point in drafting an article to protect a creditor’s interests, as a person who’s able to lend money is always in the dominant position and capable of demanding that both spouses sign the paperwork before lending them money.”

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Referring to the original article, which the Supreme Court issued in 2003, as the “evil law”, Lu said it had long been a cause for discontent among the public and more often than not wives who had been cheated of their property rights as a result of the actions of their prodigal husbands.

There were even cases where husbands had sought to cheat their partners by concocting fake loan agreements in collaboration with dubious associates who would then demand repayment from the unsuspecting and legally defenceless wife, he said.

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Judge Cheng said that when the article was introduced it was designed to help maintain market order – and creditors only as a consequence – at a time when there was a growing number of cases of couples trying to evade their debts by faking a divorce.

Ana Tan, a divorcee from Hangzhou in east China’s Zhejiang province, said that although the revised article would make it harder for couples to fake their joint liabilities, it would be difficult to accurately define “necessary” marital spending, and that could still provide a loophole for unscrupulous people to exploit.

“Buying a home in a megacity like Beijing or Shanghai, for example, can cost tens of millions of yuan, and with an expense that big it would be easy to hide a personal debt within it,” she said.

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Nevertheless, she said the move reflected President Xi Jinping’s desire to promote both the institution of marriage and family values at a time when the divorce rate was rising sharply.

“Since Xi came to power, we have seen quite a lot about family virtues,” she said. “You can even see how he tries to set a good example on his visits to other countries with his wife.”