Reimbursement for Paying Separate Debts of a Spouse in Arizona

Reimbursement Separate Debts Arizona Divorce.

Reimbursement for Community Funds Used to Pay Separate Debts

Some people ask us about reimbursement for paying separate debts of a spouse in Arizona. This question usually arises when a person has filed or is considering filing for divorce or legal separation. We are going to talk to you about several Arizona Court of Appeals decisions that addressed the question about obtaining reimbursement for community funds used to pay the separate debts of a spouse in an Arizona divorce case.

Reimbursement for Paying Spouse’s Separate Student Loan Debts in Arizona

In an unpublished decision, the Arizona Court of Appeals in the case of Imatdinov v. Imatdinov had to decide whether the wife was entitled to any reimbursement for the payment of the husband’s premarital student loans with money earned while the couple was married.

In that case, the husband had made a lump-sum payment of $27,000.00, along with smaller monthly payments, on his student loans during the marriage. The Arizona Court of Appeals ruled the community was entitled to a community lien for all of those payments made with monies earned during the marriage.

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Reimbursement for Paying Spouse’s Separate Child Support Debts in Arizona

The Court of Appeals in the Imatdinov case pointed to the earlier Court of Appeals case of Deluna v. Petitto to support its decision that the community is entitled to reimbursement when community funds (i.e., money earned during the marriage) are used to pay the separate debts of one of the spouses.

The Deluna case dealt with a claim for reimbursement when community funds were used to pay one of the spouse’s child support obligations from another relationship. In that case, the Arizona Court of Appeals concluded the community was entitled to reimbursement for the monies paid to satisfy one of the spouse’s separate child support obligations.

Reimbursement for Paying Spouse’s Separate Obligations to a Former Spouse in Arizona

The Arizona Court of Appeals in the Deluna case cited to yet an earlier decision on the subject of reimbursement for a spouse’s payments of obligations owed to a former spouse. That case was called Potthoff v. Potthoff. In the Potthoff case, a man owed his former wife money for his former wife’s community property interest in a house that was awarded to the husband in his prior divorce.

The husband paid those amounts to his former wife with earnings he accumulated after he got married to his second wife. The Arizona Court of Appeals in the Potthoff case ruled the man’s second wife was entitled to a community lien for all payments the husband paid to his former wife during his second marriage.

Community Lien Theory for Reimbursement of a Spouse’s Separate Obligations

Reimbursement of Separate Obligation of Spouse in Arizona.

In all of the cases discussed above, the court granted what is referred to as a community lien to enforce reimbursement of a spouse’s separate debts and obligations. A community lien is a lien against all community property owned by the parties. You should understand that a person holding a community lien only receives 50% of that lien in a divorce.

For example, let’s say the community pays off $100,000.00 of their spouse’s sole and separate debt. In a divorce, the community may be entitled to a community lien of $100,000.00. When that lien is divided between the spouses, the husband will receive $50,000.00 of that community lien and the wife will receive $50,000.00 of that community lien.

This works out because each spouse would have received $50,000.00 each of the $100,000.00 if the money used to pay the separate debt was still in the parties’ bank account, as opposed to being used to pay a spouse’s separate debt in a divorce.

Contact Us About Reimbursement for a Spouse’s Separate Debts

If you have questions about reimbursement for paying separate debts of a spouse in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona community property and family law attorneys have decades of combined experience successfully representing clients in community property and family law cases.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your community property or family law case around today.

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Arizona Community Property Laws | Hildebrand Law, PC