‘Til debt do us part?


Alexandra Gaglione, Trainee Associate, delves into the debts chargeable to the Community of Acquests following the celebration of marriage, providing a thorough analysis of the three matrimonial regimes contemplated by Maltese Law.

‘Til debt do us part?

The celebration of marriage brings about several legal effects beyond a change in one’s civil status. Whilst money and financials aren’t the easiest of topics to discuss, future spouses should have a clear idea of each other’s financial positions, vis-à-vis assets, and more importantly, debts and liabilities.

The Community of Acquests Regime

As a baseline, the default matrimonial regime contemplated by law is the Community of Acquests (“the COA”). This stems out of Article 1316 of the Civil Code which provides that marriage celebrated in Malta shall, in the absence of an agreement to the contrary by a public deed, produce ipso jure between the spouses the community of acquests. In simpler terms, the COA refers to a regime whereby from the moment of marriage, any assets acquired, and liabilities incurred belong to both the spouses in equal shares, forming one large ‘estate’. This regime is administered by the spouses themselves who jointly administer the goods forming part of the estate.

Article 1320 of the Civil Code holds that the following will form part of the COA:

  • All earnings, such as salaries, of both spouses;
  • The fruits of any properties owned by both spouses, including on paraphernal property (i.e. property owned by the individual spouses prior to marriage)
  • The fruits of the property owned by the children as is subject to the legal usufruct of any one of their parents;
  • Any property acquired with moneys or other things from the acquests, even if such property was acquired in the name of one of the spouses;
  • Any property acquired with moneys or other things which either of the spouses possessed prior to the marriage, or which they acquired after the marriage in the form of donation or succession or other title, even if such property may have been acquired in the individual spouse’s name, saving the right of such spouse to deduct the sum disbursed for the acquisition of such property;
  • Fortuitous winnings made by either or both spouses;

The legal assumption is that the property held by either spouse forms part of the COA, unless the spouse can prove otherwise, i.e. that it forms part of the spouse’s paraphernal property as contemplated by Article 1322 of the Civil Code. As previously noted, it is both spouses who will administer the property within the COA jointly. There are certain minor administrative acts, i.e. ordinary acts of administration that maybe performed alone (i.e. by spouses individually) whilst acts of extraordinary administration must be performed by the spouses together. The law only defines the latter type, therefore any act that falls out of the list contemplated in Article 1322 (3) are classified as ordinary.

Debts Chargeable to the Community of Acquests

The natural question stemming from such a regime is which debts are chargeable to the COA? This is answered by the law itself through Article 1327 of the Civil Code:

  • Costs relating to assets forming part of the COA;
  • Expenses related to the administration of the COA;
  • Expenses incurred for the needs of the family;
  • Obligations contracted by spouses jointly;
  • Costs relating to ordinary repairs of personal property of either spouse if the fruits of the property are entering into the COA;
  • Any civil debt created by each spouse except those created by a civil remedy to a wilful offence.

Any debt of a personal nature will first be charged to the paraphernal property of the spouse. For example, a creditor’s debt will first be charged to the paraphernal property of the respective spouse. However, should the paraphernal property be insufficient to satisfy the debt, the creditor may enforce their claim in subsidium against the assets forming part of the COA but only to the extent of the value of the share which such spouse has in the COA, i.e. 50%. As a third step, if the assets forming part of the COA do not satisfy the debts, the creditor may then enforce their claim in subsidium the paraphernal properties of BOTH spouses to satisfy the debts as per Article 1330.

For debts due as a civil remedy in respect of a wilful offence committed by either spouse or those that arise out of the exercise of a trade, business or profession as referred to in Article 1324, the creditor may not enforce their claim against the paraphernal property of the spouse who has not given rise to the claim, but may in such cases enforce their claim to the extent of any part remaining unsatisfied by the assets of the community of acquests, against the paraphernal property of the spouse giving rise to such claim.

In the case P & S Limited et vs Zammit et decided by the First Hall Civil Court, the Court referred to another case in the names of Sciberras pro et v Yousef Rhouni pro et, where the Court held that in a COA, spouses are jointly and severally liable. Therefore, each spouse is responsible for the entire debt and thus, creditors may enforce their claims on either one of the parties, unless it relates to an act of extraordinary administration which must be performed by both spouses. The Court noted that the only derogation from the joint and several liability is through Article 1329.[1]

Separation of Estate

However, this does not mean that this regime is the only one contemplated by law. Spouses may opt for a separation of estate by virtue of a public deed. This ensures that all property owned does not form part of any joint COA. Both spouses are free to administer their property however they wish to, without the consent of the other spouse. This means that any debts incurred throughout the marriage shall be the sole responsibility of the respective spouse and creditors cannot enforce their claims on the property of the other spouse as they can in a COA.

This may be done either prior to the marriage, in what is commonly referred to as a pre-nuptial agreement or even after the celebration of marriage in the form of a post-nuptial agreement. In the latter agreement, the effect of the separation of estate will only apply after the entering into of the agreement, whereas in the former, the separation of estate will immediately come into effect. This way, spouses may relieve themselves from the potential burden of their spouse’s debt, paving the way for financial security and better planning.

Community of Residue under Separate Administration (CORSA)

Another alternative is the Community of Residue under Separate Administration (CORSA) contemplated by Article 1338 of the Civil Code. This regime is akin to a hybrid of the COA and separate of estates. The regime provides that during the marriage, the spouses are free to administer their respective properties independently from each other. Any asset, or debt incurred is the sole responsibility of the respective spouse as the exclusive owner or debtor. Upon the termination of marriage, the residue left from the properties of both spouses will be combined and divided equally between them. This is irrespective of the differences between assets owned and liabilities owed. Therefore, in the CORSA regime, spouses will still have an interest in the other spouse’s financial situation. The main difference is that despite this interest, one cannot stop the other from administering their property in whatever manner they choose to.

In conclusion, future spouses have three main options to consider when planning their financial future as spouses. One ought to carefully consider their individual circumstances and consult with the adequate professionals for catered advice.

[1] Subject to the following provisions of this article, the creditors of a spouse for debts which are not chargeable to the community of acquests whether such debt has arisen before or after the marriage, may, when such creditors cannot satisfy their claim against the paraphernal property of such spouse, enforce their claim in subsidium against the assets forming part of the community of acquests but only to the extent of the value of the share which such spouse has in the community of acquests.