The Case
Turn of Events
Danny and Brenda were happily married for years. Danny operated a successful wholesale corporation throughout the early years of their marriage, and as a result the two enjoyed financial freedom and security. Unfortunately, tougher times arrived, and when the business suffered multiple setbacks, Danny equally divided the title of his private home to include Brenda as an owner. His intention was to somewhat protect the property from potential creditors seeking to collect payment in case of default. Two years later, Danny resorted to borrowing funds to sustain his company and signed personal liability notes to the lenders. The financial situation further deteriorated, and not only were the lenders seeking to collect their loans, but Danny and Brenda’s once happy marriage was on the verge of divorce. The two were no longer able to live peacefully together and mutually decided to terminate their marriage and they filed for a divorce. In Bet Din, the primary dispute was focused on their private home, which was listed in both of their names. Danny asserted that the property should first be sold to satisfy the outstanding debts that they accumulated, and subsequently the balance should be split. After all, the debts accumulated can largely be attributed to the high lifestyle they tried to maintain. He explained that his business capital was depleted due to their extravagant spending, which indirectly caused the company’s downfall. Furthermore, he claimed that the property was originally only in his name, which clearly indicates that he is the real owner. Brenda defended that she was not a partner in Danny’s business, and is not responsible for his debts. She said that she was unwilling to forfeit her share of the property on account of Danny’s inability to earn a living. How should the Bet Din rule and why?
Torah Law
According to the ruling of the Shulhan Aruch, property that belongs to a married woman may not be collected by her husband’s creditors. This ruling is not limited only to property that she brought into the marriage but also includes any inheritance or gift a woman receives while married. Furthermore, even if the husband himself gave a gift to his wife, and he thereafter borrowed money, the gift is not subject to collection if the husband defaults on his loan. While it’s true that according to Torah law a husband is generally entitled to the proceeds and dividends of his wife’s property, he is nevertheless not owner of the principal property. He therefore may not sell the property or use it to satisfy his debt.
Leading contemporary halachic authorities concur with the common law regarding real estate proprietorship. Hence, the holder of the formal document known as the “deed” is the rightful owner of a property. Typically, evidence of ownership is listed in title reports, and the bearer of the title is unquestionably the legal owner.
This ruling is applicable even in instances in which a man transfers the title of his property to his wife’s name sometime during their marriage. Even if his spouse did not render payment for her share of the property, nevertheless, the gift extended by a husband to his wife is deemed valid and legally binding. Hence, debt accumulated may not be collected from assets that a husband transferred to his wife’s name.
Torah law requires a man to provide financial support for his wife. This responsibility is unrestricted and includes working as a menial employee to bring home earnings to cover the household budget. In instances in which a husband refuses to comply with this basic responsibility, rabbinical guidance and professional intervention are needed before bringing the matter to a Bet Din.
Hence, even in instances in which the debt accumulated was due to a wife’s extravagant spending, her assets are not subject to collection by the husband’s creditors. Since it is the husband’s responsibility to provide for his wife, he is solely responsible for their debts. In addition, it is the husband’s duty to manage their income and regulate the household spending.
By rule of the Shulhan Aruch, a husband and wife that borrow funds are equally accountable to return the loan extended to them if they both signed for the loan. In this case, since the wife also signed, her assets, including her Ketubah at time of divorce, are subject to collection by the lender. If, however, she did not sign the loan document, she is not responsible for payment.
A woman of valor understands her marital responsibilities and helps to maintain her husband’s financial stability. She only spends within her husband’s means, thereby building his trust and confidence throughout the course of their marriage. Excessive spending usually puts stress on a couple’s relationship and is very often the cause of divorce. As the wisest of all men wrote, “The heart of her husband safely trusts in her as her spending does not damage his financial status.” (Proverbs 31:2)
Endnotes:Shulhan Aruch Hoshen Mishpat 97:26, Shach H.M. 111:2, Yaskil Avdi 5:11, Shulhan Aruch Eben Haezer 69:1, Shulhan Aruch Hoshen Mishpat 77:10 see Netivot, Proverbs 31:2 see Eben Ezra.
VERDICT: A Clean Split
Our Bet Din ruled that Brenda is not liable for Danny’s debt. Therefore, she is entitled to her fifty percent share of their property. As mentioned in Torah law, property that belongs to a married woman may not be collected by her husband’s creditors. Since Danny listed Brenda as an equal shareholder of their private home, he may not thereafter use her share of the property to satisfy his debts without her written consent. Although Danny claimed that Brenda should bear the burden of his debt since it accumulated because of their lavish spending, our Bet Din rejected his claim. As a husband, Danny was responsible to earn and properly manage their income. Failing to regulate the budget properly and living way beyond his means is solely his liability. Upon verifying that Brenda did not sign for any of the loans extended to her husband, she was absolved of payment. Nevertheless, our Bet Din chastised Brenda for her harsh and vicious comments regarding Danny’s inability to earn a living. Danny made every effort to earn a living; he is presently struggling by Divine decree. Additionally, Brenda was reminded that a woman of valor only spends within her husband’s means. As excessive spending was seemingly the downfall of their marriage, it seems Brenda and Danny’s subsequent divorce could have been prevented if she’d adhered to that precept.
YOU BE THE JUDGE
On the Sneak
Bobby, Jacob, and Al were equal partners in a residential property that they purchased and renovated. Each of the three managed a different role in the partnership, which included construction work, decorating, and financing. The first serious buyer offered 2.4 million dollars for the property, enabling a distribution of 800 thousand dollars to each owner. Al rejected the offer and told the buyer that he was unwilling to sell for less than 2.7 million. However, the buyer discovered that Bobby and Jacob were ready to close at 2.4 million. Realizing that Al was the one holding back the sale, the buyer approached Al and secretly offered him 100 thousand dollars cash if he goes to contract for 2.4 million. Al agreed after making a simple calculation that the 100 thousand would bring his total to 900 thousand, the amount he was holding out for. As planned, the property sold for 2.4 million dollars, which was divided by the three partners, and Alan secretly received an additional 100 thousand dollars in cash from the buyer. Eventually, Bobby and Jacob became aware of the additional payment when reading an email sent by the buyer alluding to transfer of the cash. In Bet Din Bobby and Jacob originally requested to reverse the entire sale but afterwards claimed monetary compensation for their loss. Al defended that they readily all agreed to sell for 2.4 million, and the extra 100 thousand he received was independent of the selling price.
Are Bobby and Jacob entitled to compensation?
How should the Bet Din rule and why?