Florida is a “separate liability state” and a “separate property state.” Separate liability means that each spouse may contract individually with a creditor and incur separate debts, or both spouses may jointly execute a debt contract to pay debts such as a mortgage loan or credit card. One spouse is not liable for the debts of the other spouse’s separately incurred or contracted liabilities. As an example, one spouse is not obligated to pay their spouse’s separate credit cards. Other states, including California, Texas, and Arizona, etc., are community property states. In a community property state, most debts are considered joint marital debts, and a spouse may be liable for the other spouse’s debts.
In a separate property state, such as Florida, the law recognizes that in a marriage, each spouse may own their own separate property. In general, a creditor with a Florida judgment against only one spouse cannot collect any part of the judgment from the non-debtor spouse’s separate property. A creditor holding a joint judgment against both spouses may collect either from either spouse’s separate property or from jointly owned assets or accounts. But the general rule is that a money judgment against one spouse does not affect assets separately owned by the non-debtor spouse.
A money judgment against one spouse can have an unpleasant effect on the non-debtor spouse. In Florida, judgment creditors can engage in post-judgment discovery of family financial information to assist collection of the judgment. A judgment creditor can seek this information from the debtor spouse and separately from a non-debtor spouse. Spouses typically share financial information, and they each have knowledge of one another’s finances. A creditor holding a money judgment against one spouse may take an oral deposition of the non-debtor spouse. The creditor can ask the non-debtor spouse about any joint assets, her knowledge of the debtor’s spouse’s assets, and about any assets or money recently received from the debtor spouse. The creditor can require the non-debtor spouse to produce any documents in her possession that have any information concerning family assets.
Attempts by the debtor spouse to protect their assets can inadvertently affect their non-debtor spouse. If a debtor transfers his separate assets to his non-debtor spouse, or titles assets jointly with the other spouse, a creditor may attack such transfers as fraudulent conveyances. A fraudulent conveyance complaint names the transferee as a defendant to recover or reverse the conveyance from the judgment debtor to the non-debtor recipient. As a result, a debtor spouse’s attempted fraudulent conveyances to avoid collection may result in the creditor suing the non-debtor spouse transferee. The non-debtor spouse may have to pay their own, separate attorney to defend the fraudulent transfer action.
Another question that debtors ask is whether a judgment lien imposed on real estate is a lien on jointly owned property or separate property of the non-debtor spouse. A money judgment becomes a lien on all the debtor’s real property in any county where the creditor records a certified copy of the judgment. A judgment creditor can foreclose a judgment lien in the same manner that a bank forecloses a mortgage lien. The judgment lien does not attach to homestead property or to real property that the debtor owns jointly with a non-debtor spouse as tenants by the entireties. A debtor owns real property as tenants by entireties when then the debtor and his spouse acquired the property together in the same document at the same time during the marriage. Tenants by entireties property is exempt from collection from the debt of just one of the two spouses.
The judgment lien does not attach to any real property titled solely in the name of a non-debtor spouse, and he or she may freely sell or mortgage the separate real estate. If, however, a debtor transferred real property to the non-debtor spouse to hinder or delay the creditor with the judgment, the transfer of the real property could be unwound as a fraudulent conveyance. But not if the property was the homestead of the debtor spouse at the time of the transfer.
