Who is responsible for debts?
This concerns who is responsible for debts after marriage. If one of the parties marries and they have debts prior to marriage, the debt is the responsibility of the person to whom the debts belong. For example, if you have a student loan of $15,000 in your name, and your fiancé has a $10,000 credit card debt in his name, neither of you is responsible for the other person’s debt in this scenario.
How to deal with debts after marriage
Once married, the rules for distributing responsibility for debts differ slightly. If you and your partner co-sign a joint debt or open a shared credit card account, you will share responsibility for it equally. The rules regarding the sharing of responsibility for debts that are individually held after marriage largely depend on the area in which you live.
Consequences of sharing debts in marriage
There are two major reasons that must be clarified before your marriage, which are the potential consequences you could face if the debt is not repaid. If you co-signed for a debt or opened a joint account, late or negative payments may affect your credit reports and your credit scores. A lawsuit can be filed against both of you for accumulated debt, regardless of whether you live in a community property state or a common law state. If the debt belongs to only one spouse in a community property state, creditors may be able to go after shared assets to recover what is owed to the one who cannot cover the borrowed funds. If you divorce in a community property state, the debts you individually brought into the marriage will remain your separate debts, but debts incurred after the marriage may be divided equally between you, depending on the divorce laws of your state. In states with common law, courts follow an equitable distribution process, meaning the judge decides how to divide the marital debts.
Discussing debts before marriage
It is a good idea to talk to your partner about your financial situation before getting married, so you understand the total amount of debt you will have as a couple and who is responsible for the debt you have. This discussion is also an opportunity to develop a strategy for paying off your debts. For example, if one of you is entering the marriage with debts, discuss whether the money to pay it off will come from the joint household budget. Your partner may be willing to help pay off your debts, but if not, this is something you should know in advance. Remember to continue the discussion after marriage as new debts and financial responsibilities stack up.
Frequently Asked Questions (FAQs)
Hello, are you responsible for your spouse’s tax debts?
Your responsibility for your spouse’s tax debts depends on how tax returns are filed. If you filed a joint return, both spouses are usually responsible for any liabilities from the tax return. If you filed tax returns separately or if the debts arose while you were filing as separate individuals, you are likely not responsible for your spouse’s tax debts. If your spouse or ex-spouse failed to report income or claimed incorrect deductions, you can seek relief from the liability under the innocent spouse rule.
Does marriage affect your credit score?
Marriage does not affect your credit score. Credit scores are considered individual. Your credit score is only affected if you open a joint credit account. For example, if you apply for a car loan or mortgage together. The loan application and the repayment history arising from it will affect both of your scores.
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Sources: The Balance
Source: https://www.thebalancemoney.com/does-marriage-make-you-responsible-for-your-partner-s-debt-4588332
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