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Debt and Marriage: Everything A Couple Should Know

Published November 15, 2011

Marriage and debt go hand in hand. Many couples enter into a marriage with an already existent personal debt, while others often face debt problems in the midst of marriage.  Debt can quickly and easily become a source of contention between married couples.

Below are a few solutions for the problems faced by the individuals who are in a debt-laden marriage or are about to marry an indebted person.

Impacts of Debt on a Married Couple

Liability of the Debt of Spouse

The debt of one spouse on the other varies from state to state. Here are two basic property rules that affect the liability of one’s tax over the other.

  • The liability of the debt of your spouse on you depends on the place you live.  Many states in the United States have “community property” rules, which means that most debt incurred by one spouse during a marriage is the liability for both spouses.
  • Other states follow “common law” property rules. In these states, the debt of one spouse is usually his/her own, unless the debt is for a family necessity such as a kid’s education, shelter, etc.

Impacts of Incurring a Debt before Marriage

Usually a debt, incurred before marriage, such as the student loans that do not automatically become joint debt for a couple after marriage. However, if a couple signs on a joint account together, than both of them will become liable holders of the account.

Debt for Same-Sex Marriages

Connecticut, Iowa, Massachusetts, New Hampshire, and Vermont are all States in America which have legalized same-sex marriages. The debt rules for same-sex couples are similar to the others, except for such states where such relationship does not confer all the rights of marriage.

Accusation of Debt Together

Another matter faced by couples in a marriage is the accusation of debt together. This happens when a couple opens a joint account, which then leads to the debt problems, by any one of them. If you have co-signed a car with your debt partner, you are responsible for its monthly down payments and if you or your spouse fails to do so, you accrue the debt equally.

Similarly, in the case of a credit card with both names on it, you are liable for any misspending done over the card.

Debt In Case Of Divorce

Many times, in case of divorce, one person is stuck paying more debt than the other person. The splitting of the entire amount of debt is according to the division of the assets after the finalization of the divorce. The person with more property ends up in getting a larger part of debt than the other gets. Although, you can avoid this situation as many states enforce the equal payment of debts. However, usually the person who is benefitting the most from a divorce gets the most part of debt.

Things Couples Can Do to Avoid Debt

Debt is a major cause for the failure of marriages in the United States. If you believe that debt can become a hurdle for you and your spouse, here are some tips, which can help you to avoid the harms of debt crisis:

Discuss Spending Habits

To keep each other out of debt, couples should spend a significant amount of time together, discussing their spending habits and making a budget to avoid the shopping lavishness.

Look at Each Other’s Credit Scores

Keep a check at your partner’s credit score to know if they are falling back in their payments. Anything that may affect the credit rankings of one can have adverse affects on the other, if they apply for a loan together.

Talk About any Unpaid Loan Payments

If you are in a new couple, put all the debt related issues forward as soon as possible, to avoid any future over spending. Talk about ways of solving the debt related issues with your spouse.

Discuss your Financial Future

It is necessary to discuss the future goals ahead of time to avoid breaking the bank. Be sure to make well thought-out purchasing plans with your partner for the future to avoid the debt situations.

Save Up for Something Big

You never know when you may have to face any big investment or when you have to make up for any calamity. Therefore, to avoid getting into big debt situations, always save up to avoid stressful situations.

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