Marriage is a HUGE commitment. What’s mine is yours, right? But what about debt?
Many partners fail to realize that state laws impact what price you’ll ultimately pay for debt acquired during your union. Here’s a closer look.
First, the debt you sign for prior to tying the knot remains your sole responsibility even if your partner pitches in to help you pay it off (unless your partner was a co-signer).
But who’s on the hook for debts acquired during the marriage? Well, it depends.
Nine common property states including California, Louisiana, Nevada, and Texas say that BOTH spouses are equally responsible for all debts accumulated while married. That includes debts that one partner may have NO knowledge of or never consented to. Yikes!
But what about the remaining forty one states?
In those states, it is the person(s) who signed off for the debt’s responsibility to repay – EXCEPT if the assets were used for living expenses that benefitted both spouses and their family. These expenses might include food, clothing, or a shared residence. In that case, both partners are obligated to repay together.
Regardless of where liability falls, debt can affect the financial stability of the family long term – so be sure to discuss credit histories, priorities, repayment strategies, future liability, and all expenses you plan to undertake together!