The Superior Position of the Creditor in the Community Property Regime: Has the Community Become a Mere Creditor Collection Device?

Abstract:     
This article is a first step in an effort to critically examine the continued vitality of the community regime for regulating spousal property. Specifically, the article examines the American community property regimes in light of how they measure up against non-community property states in terms of creditor protection. The results are often surprising. The community regime grants creditors access to a variety of property for all manner of debts. For instance, the entirety of the community property, including the non-debtor spouse's wages, may be seized in some community property states for the other's premarital debts. That the non-debtor spouse has no connection to the debt and, indeed, that it carries no benefit for the family is irrelevant. Nearly everything brought in by the spouses during marriage may be seized for it. Such a result would never obtain in the forty-one non-community property states, of course, where a creditor is fairly allowed to seize only the property of the party with whom he engages. A community creditor often receives quite a windfall. Exploration of other creditor rights demonstrates similar bizarre results. The neutral observer might correctly conclude that the community property regime in the twenty-first century is really little more than a creditor collection device.

After exposing the exceptional creditor bent of the community property regime, the article goes on to explore the problem with the community's approach to debt collection. Examining the history of the regime's adoption and retention shows that the community has strayed so far from its goals of protecting women and attracting settlement in community property states that it is almost unrecognizable. Moreover, such a departure is unnecessary in light of the reasonable expectations of the creditors involved with the spouses and the protection they are granted by other, more general, laws.

The article concludes by suggesting that the community needs to begin utilizing a more "common law" approach to debt collection if it is to remain a viable marital property regime for the centuries to come.

Number of Pages in PDF File: 55

Accepted Paper Series