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The New Regulation on the Recognition of Husband and Wife’s Joint Debt Highlights the Deficiency of the Matrimonial Property System in China (II)

date:2019/11/13 Clicks:103
In fact, for a long time, the lack of norms of the matrimonial property system in China is mainly reflected in the worry and game about the protection of matrimonial common property.
1. The protection of spouse's right to know property is insufficient. According to China's current marriage law and judicial interpretation, it seems that almost all the income after marriage belongs to the property of husband and wife, but the protection of the right to know about the property of the spouse is very limited. Taking the division of property in a divorce case as an example, if the spouse does not know the specific bank account, house property and vehicle information of the other party, it is impossible for the spouse to find out which bank accounts that the other party has opened and which houses or vehicles that the other party have been purchased. This judicial dilemma objectively creates conditions for one party to conceal and transfer the joint property of husband and wife. 
2. The identification logic of property co-ownership and debt co-ownership is different. Under the mode of joint ownership, as long as the property is acquired in marriage, it does not consider whether the spouse's desire to acquire the property which is belong to personal property or joint property. However, in the mode of debt sharing identification, it is necessary to analyze whether the spouse is willing to share the debt risk (In fact, the reluctance of spouses to share the risk of debt is mainly caused by the insufficient protection of the right to know about property). The assumption of debt is actually mixed with the separate property system. Such identification difference will inevitably urge the property gainer and creditor to make various "protection" for strengthening property protection, while the spouse takes various "resistance" measures for avoiding risks.
3. The "joint production and management" which required by external debt is contrary to the division of labor of traditional family members. The traditional concept of family division of labor in China is "Male advocate outside, female advocate inside", which is no longer consistent with the modern family concept of "husband and wife jointly undertake internal and external affairs". However, in most families, one party is still mainly responsible for family affairs and the other party is mainly responsible for production and operation. If you want to distinguish "joint production and management", it is bound to recognize "individual production and management", which presumes the existence of personal income within marriage, which is obviously contrary to the concept of family division of labor and common property. In business activities, the particularity of the industry and the risk of the market also determine that the husband and wife can not "jointly" negotiate before deciding to engage in a certain business activity. Due to the lag in earnings, it takes a long time for investments in some areas to recoup, make a profit, or even end up losing money. If there is no profit, it cannot be shown that the fund is used for the husband and wife to live together, and there is no joint production and management, the expression of the husband and wife's common intention is easily overturned. If this kind of debt ask the party who is engaged in production management to undertake, such cognizance is unfair to the party that is engaged in production or creditor's right all.
In order to solve this dilemma, in the short term, it is necessary to strengthen the protection of spouse's right to know about property and establish a property declaration system in divorce proceedings. At the very least, the court can ensure that the parties can conveniently and thoroughly inquire about the property which controlled by the other party. At the same time, the court should strengthen the punishment for concealing and transferring the husband and wife's common property. In the long run, we should transform the property system in China, which is dominated by legal property system and supplemented by agreed property system, into dominated separate property system and supplemented by agreed property system. Only to do so, the logical relation between property ownership and responsibility can be straightened out and it is also conducive to the security of economic exchanges.
Author of this article:
Mingsheng LU
Chief Attorney of BONBONWU, Partner Attorney of Dentons (China), which consists of 45 offices and spans all of provinces and autonomous regions of China.
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