How to handle separation, debts and property disputes in an unmarried relationship

Legal pitfalls of joint debts: what to do if one partner stops paying?

Joint debts can be a source of serious problems in an unmarried relationship, especially if one partner stops paying his or her share. If the partners have entered into a credit or loan agreement together , they are jointly and severally liable to the creditor. This means that the creditor can demand repayment of the full amount from either partner, regardless of their internal agreement. If one partner stops repaying, the entire burden may thus pass to the other.

In the first instance, it is important to try to reach an agreement with your partner to settle the debt. If an agreement is not possible, it is advisable to treat the situation legally as soon as possible, for example by means of a written debt sharing agreement. However, this agreement does not have any effect against the creditor but can serve as a basis for any dispute between the partners.

If no agreement can be reached, the debt can be settled through the courts. The court may decide that the other partner should reimburse the part of the debt that he or she was originally supposed to repay. In extreme cases, it may be necessary to enforce the debt.

An alternative may be to take out an individual loan instead of a joint loan, thus avoiding shared responsibility for the debts.

Maintenance: what applies to the spouse and the partner?

Unmarried cohabitation does not in itself create an obligation to support your partner financially, which can be a problem especially in situations where one partner is unable to support himself or herself, for example due to illness or loss of employment.

However, the law does provide for a certain maintenance obligation between the partners if the partner is an unmarried mother. She is entitled to maintenance from the father of the child for up to two years after the birth of the child. However, if further financial support is needed, it is again up to the partners to regulate this issue contractually.

Unmarried couples should deal with these issues preemptively to avoid future conflicts, especially if their financial situation differs significantly. Early agreement can protect the weaker partner and ensure fair terms.

What to do on separation: settling assets and debts

The break-up of an unmarried couple brings specific legal challenges, especially in the area of property settlement. Unlike marriage, where community property rules apply, in an unmarried relationship each partner owns property that they acquired separately. Property acquired jointly falls under community of property, whereby the law provides for equal shares unless otherwise agreed.

On separation, the partners retain their individual property. However, if they jointly own real estate, a car or other valuable assets, their division must be agreed. The simplest way is to enter into an agreement that sets out who keeps what and, if necessary, how the financial settlement will be made. If an agreement is not possible, the dispute can be resolved in court, which can be time-consuming and costly.

Another complication can be joint debts, such as a home loan or loans. If the debt is held in one partner’s name, it may be difficult to prove that both have benefited from it. It is therefore advisable to put even financial commitments in writing.

Prevention is the key – partners should still contractually settle property issues during the relationship. This will prevent unnecessary conflict and ensure a fair settlement of assets and debts on separation.

Example from legal practice

Ms Martina and Mr Petr lived together for seven years in the family home that Martina inherited from her parents. During their relationship, they shared expenses and also set up a joint account to which each contributed a regular amount. Over the years, however, Petr had invested a considerable amount of money in renovating the house – mainly a new roof, insulation and upgrading the bathroom. The total cost of the renovation amounted to CZK 450,000.

After seven years, the relationship broke down. Martina and Petr separated, with Martina keeping the house and Petr moving out. However, Petr wanted at least part of the money he had invested in the house back, as the property remained Martina’s and she continued to benefit from the increased value of the house. Petr contacted Martina to ask for the money back. Martina acknowledged that Peter had contributed to the house, but claimed that the amount was less than Peter had stated. She also claimed that Peter lived in the house for free and therefore considered his contributions to be “rent”. They could not reach an agreement because they differed in their views on the amount of the investment and whether Peter was entitled to a full refund.

Mr Peter therefore contacted our law firm and together they prepared first a pre-action notice and then a court application for the release of the unjust enrichment. In Mr. Petr’s lawsuit, we argued that his investments in the house were concrete, demonstrable and led to an increase in the value of the property. We produced invoices for roof repairs, insulation and bathroom upgrades, all of which were in his name. We also produced joint account statements showing that he had put up most of the money for the renovations.

According to Martina, Peter himself used the house for his own living expenses and should not therefore claim everything back. She also argued that some of the work on the house had been carried out by Petr himself. According to the court’s decision, Petr had indeed invested in Martina’s property, which had increased the value of the property, and Martina had thus been unjustly enriched at his expense. The court ruled that Martina must reimburse Petr the sum of CZK 350 000. The court did not find some of the expenses (e.g. for minor works) to be justified because it was not proven that they had directly increased the value of the house.

Rights of the unmarried couple’s joint children

Under Czech law, children born to unmarried couples have the same rights as children born within marriage. This includes inheritance rights as well as rights to custody, upbringing and maintenance from both parents. However, the key prerequisite is the establishment of paternity, which can be done by registering the father at the registry office or by a court decision if the father does not voluntarily acknowledge paternity.

When an unmarried couple separates , the parents may enter into a child custody agreement, which may include determining whether the child will remain in the custody of one parent or whether there will be alternate custody. The agreement should also specify the amount of child support that the other parent will contribute. If the parents do not agree, the court decides on these issues, always giving priority to the best interests of the child.

The same rules apply to a parent’s rights of access to the child. Each parent has the right to participate in the upbringing of his/her child and to maintain regular contact with him/her.