CPG Liquidation of Assets and Liabilities, A129-133 Family Code
1. Procedure
Procedure for CPG Liquidation of Assets and Liabilities:
Step 1: Inventory
Step 2: Advances
Step 3: Reimbursements
Step 4: Debts and Obligations
Step 5: Remaining Properties
Step 6: Movable Properties
Step 7: Net Remainder
Step 8: Presumptive Legitimes
Step 9: Conjugal Dwelling
Step 1: Inventory
Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply:
(1) An inventory shall be prepared, listing separately all the properties of the conjugal partnership and the exclusive properties of each spouse. x x x
1) When [CPG dissolves], [t]he very first step is to make a full and organized inventory. This list must clearly distinguish which assets belong to the partnership as joint property and which ones are privately owned by each spouse individually. (OpenAI ChatGPT-4 [2025], reviewed by Legal / J. Del Puerto, Accessed 16 August 2025)
Example 1: When Clara and Miguel decided to legally end their conjugal partnership, the lawyer asked them to prepare two lists: one for the house, farm, and store they had acquired together, and another for Clara’s inherited jewelry and Miguel’s pre-marriage motorcycle. (Ibid.)
Example 2: After the annulment was finalized, David carefully documented the family car and shared savings under the partnership list, while his wife’s personal artwork collection and his grandfather’s pocket watch were recorded under their exclusive property lists. (Ibid.)
Example 3: When Sofia and Ramon dissolved their conjugal regime, the court required an inventory that separately identified the apartment they bought after marriage and Sofia’s scholarship fund, which was never part of the conjugal assets. (Ibid.)
Step 2: Advances
Art. 129. x x x
x x x
(2) Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either spouse shall be credited to the conjugal partnership as an asset thereof. x x x
1) [If the CPG] was spent to pay [personal debts and obligations of either spouse], that amount must be considered a [an asset of the CPG]. (OpenAI ChatGPT-4 [2025], supra.)
Example 1: During the liquidation of their conjugal assets, it was noted that Martin had used partnership funds to settle his old student loan. That payment was entered back as an asset of the partnership so the balance could be fairly shared. (Ibid.)
Example 2: When Elena and Roberto’s conjugal partnership was dissolved, the records showed that the family’s joint account was used to pay for Roberto’s unpaid traffic fines. The accountant credited those payments back to the conjugal estate as part of its assets. (Ibid.)
Example 3: After separation, the inventory revealed that household funds had been spent to cover Lara’s personal credit card purchases unrelated to the family. Those amounts were added back to the conjugal property list as receivables of the partnership. (Ibid.)
Step 3: Reimbursements
Art. 129. x x x
x x x
(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property or for the value of his or her exclusive property, the ownership of which has been vested by law in the conjugal partnership. x x x
1) Reimbursement is due to the spouse:
(a) Whose exclusive funds were used to acquire property owned by the CPG; or
(b) For the value of his/her exclusive property where ownership is vested by law to the CPG.
Example 1: When Daniel and Liza’s marriage ended, Daniel showed proof that he had used his inheritance to help purchase a beach house. During the settlement [of the CPG], he was reimbursed for the amount of his inheritance that went into the property now listed under the conjugal estate. (OpenAI ChatGPT-4 [2025], supra.)
Example 2: After the dissolution of the conjugal partnership, it was discovered that Mia’s personal savings, earned before marriage, had been used to buy the couple’s farm. She was credited with reimbursement before the remaining assets were divided equally. (Ibid.)
Step 4: Debts and Obligations
Art. 129. x x x
x x x
(4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties, in accordance with the provisions of paragraph (2) of Article 121. x x x
Related provision:
Article 121. The conjugal partnership shall be liable for:
x x x
(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them with the consent of the other; x x x
1) Solidary obligation – refers to an obligation “in which each of the debtors is liable for the entire obligation, and each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors”. (AFPRSBS v. Sanvictores, G.R. No. 207586, 17 August 2016, Per Mendoza, J.)
2) When a conjugal partnership ends, one of the key steps is settling its debts. These obligations must first be covered using the common property owned by both spouses. If the shared assets are not enough to fully pay what is owed, the law requires both spouses to be [solidarily liable] for the remaining balance. (OpenAI ChatGPT-4 [2025], supra.)
Example 1: When Marco and Helena’s conjugal partnership was dissolved, they discovered the partnership still owed money for the renovation of their family-owned restaurant. Since the business earnings and joint savings could not cover the full debt, [the contractor may claim the entire unpaid amount form either of the spouses via their exclusive properties]. (Ibid.)
Example 2: During liquidation, it was revealed that Andres had borrowed funds during the marriage, with Sofia’s written consent, to buy new equipment for their jointly operated farm. After dissolution, the conjugal estate fell short of paying the loan, so [either of the spouses can pay the full unpaid balance with] their personal properties to settle the remaining obligation. (Ibid.)
Example 3: When Clara and Joel ended their conjugal regime, the accountant noted an outstanding debt for a delivery truck purchased by Joel, who was the administrator-spouse. Since the conjugal estate lacked sufficient resources to pay the loan in full, Clara’s exclusive jewelry [was used to pay for the balance as Joel had no exclusive properties]. (Ibid.)
Step 5: Remaining Properties
Art. 129. x x x
x x x
(5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them. x x x
1) When the conjugal partnership comes to an end, and after all debts, reimbursements, and asset distributions have been settled, each spouse is entitled to receive back whatever is left of their personal or exclusive property. In simple terms, once the partnership has been fully liquidated, the spouses reclaim the assets that legally belong to them alone, separate from the conjugal estate. (Ibid.)
Example 1: After Miguel and Teresa’s conjugal partnership was dissolved, Miguel was handed back his personal library of rare philosophy books, which had always been his exclusive property and remained untouched during the liquidation. (Ibid.)
Example 2: When Rosa and Daniel ended their marriage, Rosa retrieved the farmland she had inherited from her parents, as it was not part of the conjugal estate and was returned to her after the settlement of all obligations. (Ibid.)
Example 3: During liquidation, it was confirmed that Leo’s exclusive property — a set of professional medical instruments he purchased before marriage — was not used to settle any debts. After the process, the instruments were formally restored to him. (Ibid.)
Step 6: Movable Properties
Art. 129. x x x
x x x
(6) Unless the owner had been indemnified from whatever source, the loss or deterioration of movables used for the benefit of the family, belonging to either spouse, even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any. x x x
1) If a spouse’s exclusive movable property has been used for the benefit of the family and it was lost or became deteriorated over time, the CPG shall pay for the movable even if the loss or detoriation was caused by a fortuitous event – unless the owner-spouse has already been indemnified from whatever source, such as insurance or payment from a third-party who may have caused the loss or damage.
Example 1: During liquidation, it was noted that Julia’s personal van, which she owned before marriage but was used daily to take the children to school, was destroyed in a flood. Since no insurance payout was received, the conjugal funds were used to reimburse her for its value. (OpenAI ChatGPT-4 [2025], supra.)
Example 2: When Ramon and Eliza dissolved their conjugal partnership, Eliza’s exclusive sewing machines, which she had allowed the family business to use, were ruined by fire. Because she hadn’t been compensated by any other means, she received reimbursement from the conjugal estate. (Ibid.)
Example 3: At the time of separation, Carlo’s sound system — originally his bachelor property — was found to have deteriorated from constant use at family gatherings. With no outside compensation available, the conjugal assets were used to pay him for the lost value. (Ibid.)
Step 7: Net Remainder
Art. 129. x x x
x x x
(7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code. x x x
1) The net remainder of the CPG shall be divided equally between the spouses unless:
(a) a different proportion or division was agreed upon in the marriage settlement; or
(b) there is a voluntary waiver; or
(c) a forfeiture of such share as provided under the Family Code.
2) At the conclusion of the conjugal partnership, once all debts have been settled, reimbursements made, and exclusive properties returned, what remains of the shared estate is considered the partnership’s net profit. By default, this balance is divided equally between the spouses. However, this equal division may change if the couple had agreed to a different arrangement in their marriage settlement or if one spouse has voluntarily waived or legally forfeited their share under the Family Code. (OpenAI ChatGPT-4 [2025], supra.)
Example 1: When Adrian and Felisa’s conjugal partnership was dissolved, the remaining balance after all obligations was ₱2 million. Since they had no special marriage settlement, the amount was divided equally, with each spouse receiving ₱1 million. (Ibid.)
Example 2: During the liquidation of Samuel and Irene’s conjugal estate, it was found that their prenuptial agreement provided Irene with a 60% share of any remaining profits. Accordingly, the ₱500,000 surplus was split ₱300,000 to Irene and ₱200,000 to Samuel. (Ibid.)
Example 3: After separation, Marco chose to formally waive his right to his share of the partnership’s net remainder in favor of his wife, Carla. As a result, she received the full value of the leftover conjugal assets. (Ibid.)
Step 8: Presumptive Legitimes
Art. 129. x x x
x x x
(8) The presumptive legitimes of the common children shall be delivered upon the partition in accordance with Article 51. x x x
Related provision:
Article 51. In said partition, the value of the presumptive legitimes of all common children, computed as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities, unless the parties, by mutual agreement judicially approved, had already provided for such matters.
The children or their guardian or the trustee of their property may ask for the enforcement of the judgment.
The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate successional rights of the children accruing upon the death of either of both of the parents; but the value of the properties already received under the decree of annulment or absolute nullity shall be considered as advances on their legitime.
1) Presumptive legitimes – refers to what children would-have received as their share once the marriage of their parents terminates by reason of death of either/both.
2) When a conjugal partnership ends, the law protects the inheritance rights of the couple’s common children. At the stage of partition, the children are entitled to receive their presumptive legitimes — that is, the share they would likely inherit in the future from their parents’ estate. This value is calculated as of the date of the court’s final judgment and may be given in cash, property, or reliable securities. If the parents have already agreed on how this will be delivered and the court has approved it, that agreement may apply. The children, or their legal representatives, have the right to enforce this delivery. Importantly, what they receive now will be treated as an advance against their inheritance, so when the [other parent] later pass[es] away, the earlier distribution will be deducted from their final share. (OpenAI ChatGPT-4 [2025], supra.)
Example 1: When Diego and Marissa’s conjugal partnership was dissolved, their two children were each given a parcel of land valued at ₱500,000 as their presumptive legitime. Years later, when Diego passed away, the value of that land was deducted from the children’s final inheritance. (Ibid.)
Example 2: After the court annulled the marriage of Clara and Jose, their daughter was delivered her presumptive legitime in the form of government bonds approved by the court. The child’s guardian managed the bonds on her behalf until she turned eighteen. (Ibid.)
Example 3: During liquidation, it was determined that Samuel and Ruth’s children should receive part of their presumptive legitime in cash and part in shares of stock. When Samuel later died, the earlier cash and shares were treated as an advance, and the children only received the remaining balance of their rightful inheritance. (Ibid.)
Step 9: Conjugal Dwelling
Art. 129. x x x
x x x
(9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom the majority of the common children choose to remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise. In case there is no such majority, the court shall decide, taking into consideration the best interests of said children. (181a, 182a, 183a, 184a, 185a)
1) When a conjugal partnership is dissolved and the properties are divided, special rules apply to the family home and the land it stands on. By default [and there is no contrary stipulation], the house and lot are assigned to the spouse with whom most of the children wish to live. If the children are younger than seven years old, the law assumes they will stay with their mother unless the court rules differently. However, if there is no clear majority choice among the children, the court will decide who gets the conjugal dwelling, always guided by what will best protect the welfare of the children. (OpenAI ChatGPT-4 [2025], supra.)
Example 1: When Carlo and Elena separated, three of their four children chose to live with their father. Because of this majority, the court adjudicated the family home and lot in Carlo’s favor so the children could continue living there. (Ibid.)
Example 2: After Teresa and Miguel’s marriage was annulled, their twin sons, both aged six, were legally presumed to stay with their mother. As a result, the house and lot were adjudicated to Teresa, giving the boys stability during their early years. (Ibid.)
Example 3: During the division of property between Marco and Liza, two children wanted to stay with Marco, two with Liza. Since there was no majority, the court stepped in and awarded the home to Liza after determining that her work schedule allowed her more time to care for the children. (Ibid.)
