A marriage in community of property can cost you initially a few thousand rand cheaper due to the fact that no ante nuptial contract is required, But can later on have huge financial implications to persons.  When married in community of property the spouses’ estate, meaning what they own/assets and any debt/liabilities, are join together and do they have to manage the estate together.  All assets and liabilities accumulated prior and during the marriage will fall into the joint or communal estate.  

Tom and Angela were married in community of property and bought a house together.  Their marriage hit the rocks and along with it their finances.  As they were financially in trouble due to an outstanding bond on the house, which they could not afford, they also did not acquire the assistance of attorneys for the divorce.  An order was granted for a divorce and division of the joint estate.

What will happen to this debt of the bond and who is responsible to pay it?

Will the financial institution split the debt in two?

I know my ex partner and he or she will not assist in paying this debt.

These are regular question that we have relating to the situation sketched between Tom and Angela being married in community of property without estate planning.

Community of property has the effect at the time of a divorce that the asset will be split in half, BUT both persons are liable and responsible for any debt that was incurred during the marriage and even prior to the marriage.  Either party can be approached by the Creditors to collect their outstanding amounts.

In Tom and Angela’s situation the debt on the property is a joint debt.  They are therefor jointly and severally liable for the bond debt. This means that each partner is not just liable for half of the debt now that they are divorce but that the bank can in fact seek full payment of the amount from either of the spouses.  The one spouse who is held liable by the bank in this situation would then have a claim of 50% of the debt against the other.  This will however be their responsibly and for their account to collect the 50% from the other ex-spouse and not the responsibility or the problem of the bank.

In some instances Creditors have agreed or accepted 50% from one spouse and released them from the liability but this does not happen often.  The bank in this matter has no responsibility to do so.

Always remember in these same instances that the divorce order or settlement makes a special mention of debt and specifically to mortgage bonds.  If it is not specified the joint liability principle as referred to above applies. 

After the divorce the bank or any other creditors should be supplied with the divorce order or settlement made an order of court to avoid any uncertainty regarding ownership and liability for the debt.

It is always best to take advice from a properly qualified person, be it before getting married or during the termination of the marriage by a divorce.  Make sure when entering into a marriage proper research is done regarding the legal relationship that forms and the legal consequences of the different forms of marriage.    

Reference List: Practical guide to Patrimonial litigation in Divorce actions Divorce act 70 of 1979