Taking out a loan as a couple is a common procedure, often seen as a simple administrative formality. However, the legal implications are far from trivial and vary considerably depending on the nature of the relationship: cohabitation, civil solidarity pact (PACS) or marriage. The question of each person's financial responsibility in the event of default is directly linked to the couple's legal status. The aim of this article is to provide an overview of the applicable rules, a subject we cover more generally in our publication on the seized debtor's rights and obligations. Understanding these mechanisms is essential if you are to anticipate risks and protect your assets, an area in which the assistance of an expert is essential. lawyer specialised in credit law can prove decisive.
Introduction to consumer credit repayment and the role of the couple
Definition and scope of the credit transaction
According to the French Monetary and Financial Code, a credit transaction is an act whereby one person makes funds available or promises to make funds available to another for consideration. In practical terms, this covers the majority of loans granted by professionals, whether consumer credit for the purchase of a vehicle or property loans. The fact that the loan is onerous, most often evidenced by the payment of interest, is an essential condition for it to be classified as such.
Onerous nature and consumer credit
Consumer credit is specifically regulated by the French Consumer Code. The law precisely defines the parties involved: the lender, who must be a professional acting in the course of his business, and the borrower, a natural person contracting for non-professional purposes. This legislation aims to protect the consumer by imposing strict formalities and information obligations on the creditor.
The loan contract: definition and rules
Lending money is the most common form of credit. It involves the lender handing over funds, which the borrower undertakes to repay with interest. Previously considered a "real" contract (formed by the handing over of funds), case law has established that a loan granted by a credit professional is a consensual contract, i.e. validly formed as soon as consent is exchanged. The provision of funds is no longer a condition of formation, but the lender's first obligation to perform.
Proof of contract and remittance of funds
The burden of proof lies with the person claiming to be the creditor. Simply handing over a sum of money is not enough to prove the existence of a loan; the lender must show that it was a loan contract and not a gift, for example. In addition, the lender must also be able to prove that it has actually paid the promised funds to the borrower.
The obligation and methods of repayment
In return for making the funds available, the borrower is obliged to repay them. Without this obligation to repay, the loan is not a loan. The repayment terms (instalments, duration, place of payment) are set out in the agreement. In practice, payment is usually made by direct debit from the borrower's bank account, which is held with the creditor.
Credit repayments for unmarried couples
Cohabitation: no legal solidarity and recourse by agreement
Cohabitation is a de facto union that does not create any legal obligation of solidarity between partners for debts contracted. The principle is simple: each partner is solely responsible for the loans he or she has personally taken out. A creditor cannot take action against one partner to recover the other's debt, even if the funds were used for household needs. The only exception is where the cohabitees have agreed to be joint borrowers in the loan contract. In this case, their joint signature makes them jointly liable for repayment.
The civil solidarity pact (PACS) system: legal solidarity and management of assets
The PACS introduces an intermediate system. Since the Act of 23 June 2006, the default system has been separation as to property, with each partner retaining ownership of the property they acquire and sole liability for their personal debts. However, article 515-4 of the Civil Code provides for joint and several liability for debts contracted for "everyday needs". There are notable exceptions to this joint and several liability for loans, which are only jointly and severally liable if they are for modest sums needed to meet these needs, or if they have been entered into with the consent of both partners. The partners may also opt for joint ownership, where property acquired during the pact is deemed to belong to them equally.
Credit repayment and married couples: a complex system
Solutions arising from the primary regime: joint and several liability for household debts (article 220)
Whatever their matrimonial property regime, all married couples are subject to a common set of rules known as the "primary regime". Article 220 of the Civil Code is a key part of this. It provides that debts contracted by one spouse for the upkeep of the household or the education of children bind the other spouse jointly and severally. However, in the case of loans, this joint and several liability is set aside, except in two cases: if the loan has the consent of both spouses, or if it concerns "modest sums necessary for everyday needs". The aim of this rule is to protect the household from excessive indebtedness decided by one spouse alone.
The impact of the reduced community of acquests regime on the couple's debts
This is the system applied by default in the absence of a marriage contract. A fundamental rule, laid down in article 1415 of the Civil Code, protects the joint assets. When a spouse takes out a loan on their own, they commit only their own property and income. Joint property is not committed unless the spouse has given his or her "express consent" to the transaction. This provision is a safeguard for the family patrimony and essential information for creditors, who must ensure that they have the agreement of both spouses before they can seize joint property. To find out more about the implications of this rule, particularly in relation to suretyship, see our article on specific protection for sureties.
The universal community regime and repayment of credit
Under this system, virtually all of the spouses' assets, present and future, are pooled. You might think that all debts would also be shared. However, case law has confirmed that the protection of article 1415 of the Civil Code also applies to this regime. A loan taken out by just one spouse without the consent of the other does not therefore commit the community. This solution is particularly protective of the spouse, as the amount of own property that can be seized by the creditor is often very small, or even non-existent.
The system of separation of property: independence of assets and claims between spouses
This system enshrines total independence of assets. Each spouse remains the sole owner of his or her property and solely liable for his or her debts. A creditor of one spouse cannot therefore sue the other. However, there is one major exception to this principle: the joint and several liability for household debts set out in article 220 applies. This means that, even where property is separated, one spouse may be required to repay a small loan taken out by the other for day-to-day needs. If one spouse finances the purchase of an asset for the other, he or she has a claim against his or her spouse, which will be settled when the marriage is dissolved.
The specific problem of seizure on a joint account depending on the matrimonial property regime
The seizure of a joint account by the creditor of only one spouse is a complex practical issue. The solution depends on both the matrimonial property regime and the nature of the debt. Under a community property regime, if the debt is a joint one (for example, a household debt or a loan granted by both spouses), the balance of the joint account, presumed to be joint, may be seized. However, if the debt is specific to one spouse (such as a loan taken out alone), the creditor can only seize the share of the funds in the joint account belonging personally to the debtor, which is often very difficult to prove. The implementation of this measure is described in detail in our article on attachment of a bank account.
Managing debts contracted as a couple requires a clear understanding of the rules applicable to each situation. The choice of marital status or matrimonial property regime is never without consequences for household assets. For an in-depth analysis of your situation and tailored advice, please contact our team atlawyers.
Frequently asked questions
If I'm cohabiting, am I responsible for my spouse's credit?
No, unless you signed the loan contract as co-borrower. In the absence of a joint signature, each cohabitee is liable only for his or her own debts, with no legal solidarity.
Does a PACS (civil solidarity pact) protect you from your partner's debts?
The PACS provides for joint and several liability for debts arising from everyday needs. However, for loans, this solidarity is limited to modest sums or loans signed by both partners, offering greater protection than cohabitation.
Under a joint property regime, does a loan signed alone commit the joint assets?
In principle, no. Article 1415 of the Civil Code protects the joint estate by stipulating that a loan taken out by only one spouse commits only his or her own property and income, unless the spouse has given his or her express consent.
Does the system of separation of property provide full protection against a spouse's debts?
For the most part, yes. However, joint and several liability for household debts (article 220 of the Civil Code) applies, which means that a spouse may be required to repay a small loan taken out by his or her partner for day-to-day household needs.
Can a creditor seize our joint account for the debt of just one spouse?
This depends on the nature of the debt and the matrimonial property regime. If the debt is considered joint (for example, a household debt), seizure is possible. If the debt is specific to only one spouse, the creditor will have to prove that the funds in the account belong to the debtor, which is often impossible.
Which matrimonial property regime offers the best protection against a spouse's debts?
The system of separation as to property offers the greatest protection, as it establishes an independence of property. However, no system offers complete protection from legal solidarity in respect of the modest household debts necessary for day-to-day living.
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