It is not uncommon for spouses to issue IOUs to one another. In such cases, one spouse lends joint marital property to the other for personal business ventures or private affairs, and upon divorce, seeks repayment based on the IOU. Many assume that because marital assets are commingled, an IOU between spouses is merely worthless paper. However, judicial standards are clear: loan agreements between spouses that meet legal requirements are valid and enforceable. Upon divorce, the lending spouse may assert a claim for repayment in accordance with the terms of the agreement; such claims are not automatically barred.

  Pursuant to Article 1065 of the Civil Code, spouses may agree that property acquired during the marriage and premarital property shall belong respectively to each party, jointly to both parties, or partly to each party and partly jointly; such agreements must be in writing. A loan agreement between spouses is, in substance, an agreement by the parties regarding the disposition of their joint property and constitutes a special form of property arrangement. The Judicial Interpretation on Marriage and Family of the Supreme People's Court further clarifies that where spouses enter into a loan agreement whereby joint marital property is lent to one spouse for personal business activities or other personal matters, this shall be deemed as an agreement by the parties to dispose of their joint property, and upon divorce, the matter shall be handled in accordance with the terms of the loan agreement.

  Courts examining such cases focus on three key elements. First, the borrowed funds must have been used for one party's personal business or affairs; if used for joint family living expenses, they constitute normal household expenditures and cannot be claimed for repayment. Second, the IOU must satisfy all formal requirements: it should clearly state the loan amount, purpose, signatures of both parties, and date. Claims based solely on oral statements without written evidence are unlikely to be supported. Third, the funds must have been actually delivered, as evidenced by bank transfer records or withdrawal receipts, to prevent fabricated debts from diluting marital property.

  The scope of repayment liability is limited to the principal amount of the loan and any interest accrued. If interest has been agreed upon and does not exceed the statutory maximum, it shall be calculated according to the agreement; if no interest has been agreed upon, the loan shall be deemed interest-free. The source of repayment is the borrowing party's share of the joint property. In the event of divorce and property division, the loan is typically repaid by the borrowing party using the property allocated to them or their personal assets.

  The party asserting their rights shall preserve the original IOU, transfer records, and evidence regarding the purpose of the funds in full. In cases where fictitious spousal debts are fabricated to dilute assets, the other party has the right to raise objections and demand proof of the actual flow of funds.

  The litigation pathway and statute of limitations require advance planning. In divorce proceedings, the party holding an IOU may assert the loan claim alongside the division of marital joint property, allowing the court to address both matters within the same case. Alternatively, the creditor may file a separate lawsuit for repayment after the divorce; however, they must observe the three-year general statute of limitations, which commences from the date the agreed repayment deadline expires. If no repayment deadline was specified, the limitation period begins from the date the right to claim is denied. Prolonged delay may result in the loss of the right to prevail in court. Any interest rate agreed upon between spouses that exceeds the statutory cap is invalid and will not be protected by the court; claims should be limited to the principal and legally permissible interest.

  In summary, a legally valid loan agreement between spouses is protected by law: loans used for personal business or individual matters shall be repaid according to the agreement upon divorce, whereas amounts used for joint household expenses cannot be claimed. Standardizing the execution of such agreements and maintaining clear records of fund flows are key to preventing such disputes.