Family Purpose Credit

The Marital Property Act creates an obligation "in the interest of the marriage or the family" at   Sec. 766.55, Wis. Stats (PDF: external link).  This has been termed a "family purpose" obligation. Unfortunately, there is no definition of either term. The statute simply states that an obligation incurred by a spouse during marriage is presumed to be for such a purpose. A family purpose debt is not limited to consumer credit transactions.

Therefore, if a spouse applies for "family purpose" credit the creditor must consider all marital property available to satisfy the obligation in the same manner that it considers the availability of property of an unmarried applicant. Any financial organization or other credit granting commercial institution that violates this section may be fined up to $1,000 (  Sec. 766.56(4)(a), Wis. Stats. (PDF: external link)).

Most creditors will likely secure a statement separately signed by the applicant spouse at or before the time the obligation is incurred stating that it is "in the interest of the marriage or the family." This, along with the presumption that all property is presumed to be marital property during the marriage and during probate, should be conclusive evidence that an obligation is for a family purpose.