Short answer. Yes. Liquidation follows a fixed order: an inventory first, then payment of the community's debts out of community assets. Only what remains afterwards is divided. If those assets fall short, both spouses are solidarily liable for the unpaid balance with their separate properties.
What the law says
The debts and obligations of the absolute community shall be paid out of its assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties
Family Code, Article 102 — Liquidating the Absolute Community. Read the full provision →
The order is prescribed, not suggested
Article 102 lays the liquidation out as a numbered procedure, and the numbering is doing real work. An inventory is prepared, listing community property and each spouse's exclusive property separately. Then the community's debts are paid from community assets. Then each spouse takes back what remains of their exclusive property. Only after all of that does the article reach the net remainder, which is what gets divided. Debts are settled before there is anything to split, not out of each spouse's share afterwards.
Why the inventory has to come first
The first step exists to answer a question that the rest of the procedure depends on: which property belongs to the community and which belongs to each spouse alone. Community debts are paid out of community assets, so nothing can be paid until the line has been drawn. The article requires the inventory to list the two categories separately, which is what makes the later steps mechanical rather than contentious.
If the community cannot cover what it owes
The article does not leave a shortfall hanging. Where community assets are insufficient, the spouses become solidarily liable for the unpaid balance with their separate properties, on the terms of the second paragraph of Article 94 to which this clause refers. Solidary means a creditor may pursue the whole balance from either spouse. So the end of the property regime does not extinguish community obligations; it changes who can be pursued for them.
What is left is what gets divided
Only the net remainder is divided, and the article's default is that it is split equally between husband and wife — unless a different proportion was agreed in the marriage settlements, or there has been a valid waiver of a share. The presumptive legitimes of the common children are then delivered upon partition. This is general information about the sequence the Code sets; how it applies depends on what the inventory actually shows.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Brigido B. Quia vs. Rita C. Quiao, et al, G.R. No. 176556, July 4, 2012 — read the decision on LawPhil →
- Antonio A. S. Valdez vs. Rtc, Branch 102, Quezon City, et al, G.R. No. 122749, July 31, 1996 — read the decision on LawPhil →
- Lucila David and the Heirs of Rene F. Aguas, namely: Princess Luren D. Aguas, G.R. No. 241036, January 26, 2021 — read the decision on LawPhil →
- Noel Buenaventura vs. Court of Appeals, et al, G.R. No. 127358, March 31, 2005 — read the decision on LawPhil →
Related provisions
- Family Code, Article 102 — Liquidating the Absolute Community
- Family Code, Article 94 — Charges on the Community Property