Love and finances often don’t go hand-in-hand. It’s one of the most difficult topics to bring up, and one of the hardest topics to see eye-to-eye on.
Whether you’re coming into a marriage with a lot of your own debt, your spouse has debt, or you wonder how debt is handled when you’re married, solving debt problems quickly and stress-free as possible is important.
Is a Spouse Responsible for your Debt?
Everyone wants to know, is your spouse responsible for your debt?
The short answer is ‘no.’ Your spouse isn’t responsible for your debt if it’s in his/her name only. It doesn’t matter if your spouse took out the debt before you got married or after – if your name is not on the debt, it is not your responsibility.
You may think that solving debt problems is easy then, especially if it’s your spouse that has debt and you don’t, but it’s not that easy.
What Happens to Debt When You Get Married?
Even when you get married, your debt is your debt and your spouse’s debt is your spouse’s debt. Just because you got married doesn’t make your spouse’s debt your responsibility. But there’s some grey area there.
Once you’re married, you may share finances. If you’re sharing finances, your money may go toward your spouse’s debt.
It’s not an easy decision. You may want to find debt solutions in Ontario to make the debt more affordable or make it go away. Some spouses feel frustrated or angry at their spouse’s debt and it can cause financial distress within the relationship.
It’s important to work together to create a debt relief plan and if you can’t work one out together, credit counselling is always a great option.
Are Married Couples Responsible for Each Other’s Debt?
Once you’re married, you probably wonder if you are responsible for one another’s debt. Again, it depends on how you take out the debt.
For example, if your spouse opens a credit card in his/her name only and not yours, it is not your debt, just like if he/she opened the credit card before marriage. The same is true of any debt your spouse may take out while you are married.
However, if your name goes on any of the debt at any point, you are liable too. Even if it’s a car loan for your husband’s car – if your name is on the loan, you are responsible for the entire debt. If your husband doesn’t pay the loan for some reason, the entire loan becomes your responsibility – not just half of it.
Also, if your spouse took out any debt that uses your home or any other assets as collateral and he/she defaults on the debt, you could lose the asset, even if your name isn’t on the defaulted loan.
This could affect your finances during your marriage, which is why it’s important to be on the same page and to look for help when solving debt problems that you can’t solve on your own.
How to Protect Yourself Financially in a Marriage
It’s never an easy discussion, but you must talk to your spouse or soon-to-be spouse about your finances. Don’t hold anything back or hide any debt you may have either. Together you can work on solving your debt problems if you are honest with one another.
Here are a few ways to protect yourself financially in a marriage
Don’t assume you are on the same page. No matter how much you love one another, you may have completely different views about money. Discuss your short-term and long-term goals and see where you stand. It’s normal to have different goals, but you must have a way to meet in the middle too.
- Don’t open joint credit cards or loans
If your spouse has bad credit or doesn’t know how to manage money, avoid opening credit lines together. If you put your name on his/her debt, it then belongs to you too, even if it’s not for you.
- Set up rules about using joint collateral
Have a meeting with your spouse about how both of you can (or can’t) use any joint assets as collateral, such as a house or car.
Remember, if your spouse uses a joint asset for collateral and defaults on the debt, even if your name isn’t on it, you still lose the asset because it is what was promised to satisfy the debt.
Consider Credit Counselling for Debt Relief
If you and your spouse aren’t on the same page or you can’t get ahead of your debt together, consider credit counselling. It could be the best way to ensure you get out of debt and still have your finances intact.
It’s okay if you aren’t on the same page or you can’t get ahead – it happens to the best of us. What’s important is working together to solve the problem. Solving debt problems isn’t always easy to do on your own, which is why involving the help of a professional is key.
Solving debt problems before you get married can create the most peaceful marriage, but if you’re already married or can’t solve the problems yourself, it’s important to get help.
Money and love sometimes don’t go well together, but when you work with a professional to get it right, it can be a lot easier to solve your financial problems. Whether you need help filing for bankruptcy, creating a debt relief plan, or just want someone else’s opinion about how to move forward with your finances, the experts at EmpireOne Credit are here to help.