Gifted and the Balanchine method of writing
When a couple gets married, they’re entering into a legally-binding contract. This has implications on many other aspects of their lives, including the financial aspect. These effects are not always as black-and-white as they may initially appear, and are a source of debate and argument, even among legal professionals.
This article aims to clarify a few issues and answer a few questions that have recently arisen.
1. Many people are unaware that spouses in traditional African marriages, even if those marriages have not been registered with Home Affairs, are legally viewed as being married in Community of Property. There is a “Recognition of Customary Marriages Act” (no.120 of 1998) which confirms this. This means that husbands and wives who are married by way of traditional African rites have combined their estates and accept liability for each other’s affairs.
2. There is some dispute about the impact of Community of Property marriages on applications for credit. In a previous article which we’d referenced, it was implied that if one spouse applied for credit, the creditor did not necessarily have to require the other spouse’s consent. However, subsequent research has suggested that this may not strictly be the case. Our legal experts are of the opinion that the Matrimonial Property Act requires that BOTH spouses must be reasonably expected to know and understand the conditions of any transactions which could affect their joint “estate”.
Thus, because decisions such as applying for credit affect your “estate” as a whole, ALL parties involved in that estate must be included in the decision. This implies that the creditor is obligated to ensure that they have the consent of both spouses before they can grant the credit. This opinion is supported by the fact that, should the spouse who took the credit default on their repayments, the other spouse COULD be held liable. This therefore implies that a creditor who grants credit to someone who is married in Community of Property WITHOUT confirming the spouse’s consent could be deemed to have granted that credit illegitimately or recklessly.
(Thanks to our legal experts Tim Henshall and Quintin Zimmermann for their input on this issue). 3. Getting divorced DOESN’T necessarily mean that you’re no longer bound to contracts that you entered into while you were married. Consider the case of a couple who is granted a Home Loan. This normally means that both spouses are responsible for the repayments (i.e. they are “jointly and severally liable”). If one spouse is unable to pay, the other spouse is expected to take responsibility for the full instalment.
If the couple later gets divorced, both are still responsible for ensuring that the Home Loan contract is honoured. Another question which has been addressed to us a few times concerns couples who had applied for Debt Review, and the relevant Debt Restructuring Court Order was granted. Even if they subsequently get divorced, that has no impact on the Court Order. The Order is still binding on both of them. This means that, even if one spouse pays all of their debts in full, the Debt Counsellor is legally NOT allowed to issue a Clearance Certificate if the other spouse hasn’t paid all of THEIR debts in full.
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