“What’s mine is yours and what’s yours is mine.”
This is a commonly held belief about life as a married couple. However, when it comes to debt, you might want to dial that back a bit. After all, your diligent efforts could be about to take a substantial hit if you’ve worked hard to maintain a pristine credit history and your future spouse has not.
Here are some considerations to ponder when it comes to marriage and debt.
Mind What You Co-Sign
The existing debt each partner brings into the relationship remains that partner’s alone. In fact, some debts incurred after a couple weds will be the sole responsibility of the applying spouse — if the other partner does not co-sign for the credit account.
In most cases, credit obligations follow Social Security numbers — not names. So even if your spouse gets a credit card in their married name, you could be held harmless if your Social Security number is not attached to the loan.
However, you could be on the hook if your name is on the card and you live in one of the community property states. These include Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin. Guam and Puerto Rico are community property jurisdictions too.
Don’t Help Them Pay Off Pre-Existing Debt
If you’re about to get married and your potential spouse discloses a bank vault full of bad debt, think twice before you deplete your cash reserves to help them eradicate it.
Yes, this can be a hard decision to make, but it’s one you should think carefully about.
With that much debt, they’re probably accustomed to living on more than they earn by using credit to finance things they can’t afford. When you step in and pay it off, you’ll give them a credit limit increase. You’ll also be broke when they use it up again.
Yes, do all you can to help them create a budget and stick to it so they can come into the marriage on equal terms. However, it’s a bad idea to use your money to fix the problem they created.
Depending upon the severity of their circumstance, it might also be wise to refer them to a debt specialist to help them find a way to resolve their obligations. Look for information such as these Freedom Debt relief reviews to ensure you hire the best possible professional for the task.
Converse Openly About Money
No, it isn’t first date fodder, but it is a conversation you should have before getting married. People come from different backgrounds. Some grew up in families with no money problems and an abundance of life’s bounties. Others grew up in circumstances in which every red cent mattered.
Ironically, people who grow up in situations in which they didn’t have to think about money are likely to be the least prepared to live in conditions in which it really matters. Meanwhile, those who grew up counting pennies learn how to make their money go farther early on.
Problems can ensue when these differing attitudes meet. Having money conversations early on can save the two of you a lot of grief. It can also give you more time to adjust to one another if you really are going to make a go of it. Agreeing to be together for richer and poorer is a lot easier to manage when marriage and debt are discussed early on.