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Taking Out a Loan or Loan Without the Consent of the Spouse.

Today’s entry will be devoted to the responsibility for repaying a loan or loan taken by one of the spouses without the consent of the other. The issue will be discussed from the point of view of the most common situation when there is no separation of assets between the spouses and the loan or loan agreement was signed after the marriage.

The general principle of responsibility.

The general principle of responsibility.

Under the current legal status, as a rule, the spouse is not responsible for the debts of his spouse incurred without his consent. This principle applies to both marriages with joint property and property separation.

The creditor may demand that the spouses pay joint property only if the spouse has made an obligation with the consent of the other spouse (Article 41 § 1 of the Family and Guardianship Code).

This provision does not specify in what form such consent should be given. Theoretically, it can even be an oral form, but then the creditor (eg bank) will have difficulty in initiating enforcement proceedings against the other spouse. The provisions of the Code of Civil Procedure stipulate that in order to obtain an enforcement clause (which is necessary to initiate bailiff enforcement) against the debtor’s spouse and enforce a claim in the enforcement proceedings on joint property, the creditor should prove by an official or private document that the claim arose from the legal act (e.g. contract) with the consent of the spouse. Therefore, for the creditor (bank) it is advisable to have such consent and to have it expressed in a written document. An equivalent form will also be an electronic document bearing a secure electronic signature. It invokes in the civil proceedings the same effects as a traditional written document.

A loan or loan without the consent of the spouse.

A loan or loan without the consent of the spouse.

From a legal point of view, the loan or loan agreement concluded by one of the spouses without the consent of the other is valid. However, taking into account the enforcement issues referred to above, banks usually require the consent of their spouse for loans for larger amounts. Otherwise the case is presented at the so-called quick cash loans for smaller amounts. Most banks do not require the consent of their spouse to require a certain amount of loans (usually up to several thousand zlotys) from their clients. If, in the bank’s opinion, the person applying for the loan or loan will have creditworthiness, i.e. the ability to repay the debt along with interest on dates agreed with the bank in the contract, there is a good chance that he will get it. The debtor’s spouse will not be informed by the bank about the loan or loan taken. The bank does not have such an obligation to provide information. Moreover, due to banking secrecy, to which banks are obliged to comply, the bank can not do so.

If the spouse has taken a loan or loan without the consent of his “other half”, the creditor (bank), if the debt is not settled, may demand satisfaction from:

  • personal property of the debtor,
  • from remuneration for work or from income earned by the debtor from other gainful activity,
  • benefits obtained from the debtor ‘s copyrights and related rights, industrial property rights and other rights of the creator,
  • and if the claim was made in connection with the running of the enterprise, also from property objects included in the enterprise ( eg devices, materials, goods and products, etc.).

What is the personal property of a spouse?

What is the personal property of a spouse?

Personal property means objects and rights that are only vested in one spouse. Such assets are primarily property items acquired before the creation of the property community, i.e. before the marriage.

The spouse’s personal property also includes some property and rights acquired during the marriage. Belong to them:

  • items acquired by inheritance, subscription or donation, unless the testator or donor otherwise decided, i.e., wrote them to both spouses. However, this does not apply to items of a household appliance used for the use of both spouses (eg furniture, kitchen appliances, sanitary facilities, etc.), they are also subject to a statutory common law in the event of inheritance, subscription or donation, unless the deceased or donor has decided to grant them explicitly one of the spouses,
  • property rights resulting from joint aggregation subject to separate regulations, eg property contributions contributed to a civil law partnership,
  • items used exclusively to satisfy the personal needs of one of the spouses (eg watch, clothing, glasses, small jewelry, etc.),
  • non-transferable rights that may be enjoyed by only one person (eg the right to alimony),
  • items obtained in compensation for bodily injury or causing health disorder or compensation for the harm suffered; however, this does not apply to the pension due to the aggrieved spouse due to the total or partial loss of earning capacity or due to the increase in their needs or the reduction of prospects of success for the future,
  • claims due to remuneration for work or other economic activity of a spouse (but the remuneration or income from gainful activity already paid is part of the property of the joint spouses),
  • property objects earned from awards for personal achievements (artistic, literary, technical, scientific),
  • copyrights and related rights, industrial property rights and other rights of the creator,
  • property items purchased in exchange for personal property, unless the special provision provides otherwise.

A loan or loan to meet the ordinary needs of the family.

A loan or loan to meet the ordinary needs of the family.

Since the spouse is not responsible for the debts of his spouse incurred without his consent, there is a certain exception and the other spouse is not always protected. The creditor or lender will have grounds to demand repayment of a loan or loan taken by one spouse without the consent of the other spouse, if the loan or loan was intended to satisfy the so-called ordinary family needs. It results from art. 30 § 1 kro, which states that both spouses are jointly and severally liable for the obligations incurred by one of them in matters arising from the satisfaction of such needs. The liabilities incurred in matters related to satisfying the ordinary needs of the family include obligations resulting from repetitive, ongoing activities related to the common household and raising children. The usual needs of the family are, for example, purchases in normal quantities of food and clothing, small household appliances, fees for using gas, water and electricity, expenses for repair and maintenance of home appliances, for treatment or for the purchase of school aids and the preparation of children to practice. If, therefore, a loan or loan is used to finance such needs, the other spouse is jointly and severally liable to the bank even if he has not made the commitments or has not agreed to them. In this case, the creditor (eg bank) will be able to apply to the court against the other spouse and in the event of a favorable judgment, collect the debt from the property of the joint spouses and their two personal assets.

The creditor’s right to demand the separation of assets.

The creditor

This does not mean, however, that if a loan or loan was made without the consent of the spouse for a purpose other than to meet the ordinary needs of the family, the other spouse can always sleep peacefully. Theoretically, if the creditor will not be able to satisfy himself with these assets referred to above in the paragraph “Loan or loan without the consent of the spouse”, he still has some solution provided for in art. 52 § 1a. kro This provision says that the court may set up the separation of assets also by the creditor of one of the spouses, if it makes it probable that the satisfaction of the claim established by the enforceable title requires the division of joint property of the spouses. In a situation where the court shares the legitimacy of such a request on the part of the creditor and abolishes the joint property, two personal property of the spouses with fractional shares in common things will arise, from which the creditor’s debtor will be able to try to satisfy him.

Loan or loan contracted by the entrepreneur.

Loan or loan contracted by the entrepreneur.

I would also like to mention a situation where the spouses do not have the separation of property and one of them will take out a loan or a loan for the needs of the company they run without the consent of their spouse. If the spouse is running a business, i.e. an economic activity and its components, enter the joint property, the creditor (bank) holding the execution title against such an entrepreneur may obtain an enforcement clause (and thus initiate execution) against his spouse who did not express his consent to the obligation his responsibility to these components of the company. For this purpose, it is sufficient for the court to prove in an official or private document that the loan or loan confirmed by the enforcement title was related to the running of the enterprise. Such a document may be a loan agreement in which the purpose of the loan will indicate a relationship with the company.

The situation will be even worse when the spouse of such a spouse-entrepreneur is declared bankrupt because of a loan or loan failure. At that time, in accordance with the provisions of the Bankruptcy and Reorganization Law, as from the day of the bankruptcy of one of the spouses, property separation arises between the spouses. If the spouses were in the system of joint property, the joint property of the spouses enters the bankrupt estate, and its division is unacceptable. It should be cashed and used to satisfy the claims of creditors of the bankrupt spouse-entrepreneur. The personal estate of the other spouse and items used for that spouse to conduct business or professional activity are not included in the bankruptcy estate, even if they are covered by the property matrimonial commonwealth, with the exception of items acquired for joint property during the two years before filing for bankruptcy.

The spouse of the bankrupt entrepreneur remains under investigation in the bankruptcy proceedings for receivables due to participation in joint property. He then has the status of a creditor. However, it is not privileged in relation to other creditors, moreover, it will be burdened with the obligation to prove in the conducted proceedings that the joint assets created in the period of running the business came from other sources than the income brought by the enterprise. In the absence of evidence pointing to other sources, the bankruptcy court will assume that it was the company’s income, which will adversely affect the amount of the claim claimed by the spouse in the bankruptcy proceedings.

In order to protect against such a risk, the spouses, based on a contract (concluded in the form of a notarial deed), may establish property separation. However, it should be remembered that its establishment is effective in relation to the bankruptcy estate only if the contract was concluded at least two years before the date of filing for bankruptcy.