Money can be an explosive topic for married couples who can’t get on the same page, but it can be even more explosive when it’s ignored, and a sudden event brings it roaring to the fore. Debt is a contentious issue, especially when one partner’s accounts are permanently in the red. The keys to getting on the same page and hauling accounts back into black are calm, clear communication and a good debt relief program.
The question of debt responsibility continues even when the marriage is over. We’ll look at some of the biggest burning issues, starting with bringing debt into a marriage.
Does Your Partner’s Debt Become Your Debt When You Get Married?
The short answer is no. Debt incurred by partners outside of marriage remains the sole responsibility of the partner concerned.
However, there are a couple of exceptions. If, before you got married, you co-signed a car loan for your partner, you are liable for that loan. If your partner can’t keep up the payments, you’ll have to foot the bill. It doesn’t matter that you never drive the car, by co-signing, you assume equal financial responsibility.
Joint accounts, by definition, belong to both partners, regardless of whether you opened the account before or after marriage. Dual responsibility equals dual liability for joint debts.
The state in which you live also plays a role in your liability. While most states are common-law states, which keep money matters separate even after I do, there are nine states that are community property states, which throw everything into one basket.
California is a community property state and considers all debt incurred during the marriage to be shared debt. This includes circumstances where one partner goes on a secret spending spree, and the other is oblivious. When the debt collectors come knocking, they bare equal legal responsibility for the debt.
Does My Partner’s Debt Affect My Credit Score?
As mentioned above, your partner’s debt belongs to your partner. Their financial misfortune and bad credit don’t reflect on their credit score.
That is unless you’ve co-signed on loans or bank accounts or have joint credit card accounts or loans. Whatever happens to the account reflects on both of your credit scores. If the joint account is set up to pay utilities, but one of you hasn’t contributed to the account for a few months, and there isn’t enough money to pay the bills, both of you will see it reflected in poor credit scores.
This could necessitate a visit with debt relief service providers to help both married partners recognize their responsibility to one another and develop a joint budget or financial plan to ensure you don’t end up in marital debt again.
When Do I Owe My Spouse’s Debts?
There is often confusion about who is liable for what, especially after a divorce or death.
In a community property state, even after divorce, you are still liable for debts that were incurred during the course of the marriage. During the divorce process, the divorce judge usually divides debt in half, so each partner has to pay an equal share to creditors. However, if your partner dies, you aren’t liable for anything other than joint credit card debt.
In common law states, you aren’t responsible for any personal debt accrued by your deceased partner. Debt collectors might still come calling, but you are under no obligation to pay a cent toward the debt. Some debt collectors might try to convince you otherwise and may even hint at potential consequences if you don’t pay up.
The best thing to do is visit a lawyer for legal advice regarding the unpaid debt.
Always get all the details of the debt from the debt collector, including contracts and supporting documentation. If they are reluctant to provide details or start filibustering, they’re likely to be scammers. Remember, you can dispute the debt if it’s patently not yours.
Financial Issues in a Marriage: How To Overcome Them
If you want to overcome financial issues that are threatening your marriage there are two things you must do.
1) Communicate Calmly
If either of you gets heated up, the other becomes defensive, which could result in a shouting match or withdrawal. Neither of which is helpful.
2) Suspend Judgment
If you believe that your partner is judging your approach to personal finances, you are less likely to open up completely. You might keep certain information secret or tell half-truths. The same applies if the situation is reversed. Your partner is hardly likely to participate fully in the process if you’re making them feel like a fool.
Head Towards a Safe Financial Future
Everything else stems from these two points. You can trust each other and think of yourselves as a partnership with common goals and not as individuals with completely different attitudes toward saving. You can tackle financial matters head-on and not hide from them, hoping they’ll go away.
It’s important to be clear about mine, yours, and ours and to work out budgets accordingly. Don’t shy away from debt relief solutions if that’s what it takes for you two to get back on track.
Make financial meetings a regular occurrence, once a quarter, for instance, so that you are always on top of the situation and aren’t blindsided by a revelation two weeks before the repo men arrive on your doorstep.
Set joint financial goals, such as saving for a new kitchen or going on a skiing holiday in France. Working towards something you both want can be very unifying.
Debt Relief is a Key That Can Unlock Financial Freedom
Alleviate Financial Solutions specializes in debt settlement for clients who need assistance getting out of overwhelming debt. Whether you need assistance with student loans or credit card debt relief, our debt experts ensure you get the most favorable terms possible.
If your debt is getting you down, contact us via our onsite contact form to get started or call us on (877) 879-4905. We’ll lead you to a debt-free life.