Meaning
Judicial interpretations explain the criteria for determining whether a debt incurred by one spouse during a marriage should be treated as a joint liability. Under supreme people’s court interpretation fa shi 2018 no 24, a debt is only shared if both spouses signed the contract or if the money was used for the family’s daily needs.
Creditors Burden
Creditors can no longer simply assume that a husband or wife is responsible for the partner’s business loans. This change protects the non borrowing spouse from being targeted by enforcement actions.
Courts Criteria
Courts require the creditor to provide evidence that the debt provided a benefit to the household. If the loan was used for a private business venture without the consent of the other spouse, it remains a personal debt. This interpretation resolved a long period of legal uncertainty that had seen many individuals lose their personal property for debts they did not know about.
It forced banks and lenders to change their signature requirements for new loans.
The Reach
The rules apply to all new cases and many cases that were still in the enforcement phase at the time of the announcement. This shift in the burden of proof has made it harder for creditors to collect on certain types of unsecured loans.