When you meet someone new, finding out their credit score is typically not your go-to first date conversation starter. In the whirlwind of new romance, money matters tend to remain ignored. It is often much later in the relationship—after a couple has already become financially entwined through marriage or the sharing household bills—that financial issues come to the surface. You may be surprised to find out your spouse has accrued a substantial debt that you had no idea about. When facing this startling new information, it may be difficult to know how to move forward with your partner. Here are some tips to dealing with a spouse who has debt.
1. Hold Off On Making Judgements
In situations like this, emotions can run high. You may feel lied to or betrayed by your partner for concealing their debt. Breathe through your initial reaction. When people feel attacked they tend to shut down or become defensive. Keeping an honest, open space for communication with your spouse will allow you to move forward to fix this problem together. This also goes for making judgements about their
current financial choices. If you see your spouse making consistent efforts towards paying off a debt, don’t chide them for their purchase of a new pair of shoes. Paying off debt is a process that you cannot expect your spouse to complete overnight.
Keep in mind that debt accumulates for many reasons and a past debt does not necessarily mean your partner cannot be financially responsible now. Maybe they were overzealous with their first credit card or are struggling with student loan debt. Unemployment, divorce, and medical expenses can also add up quickly. Don’t judge too harshly until you have the full picture of your spouse’s debt.
2. Get the Details
The amount of debt your spouse has makes a difference, so it is important to know the exact number they are currently working to pay off. How your partner is paying off the debt matters, too. Is the repayment situation short term (over a year or two) or long term (5-20 years)? If it is a long term repayment plan, you can expect this debt to impact your life together for years to come. This is also the time to check your spouse’s credit report with them. This will give you the full picture of any late payments, high balances, legal judgements, or bankruptcy filings they may have.
3. Know When You’re Liable
Many people assume that once you get married, you automatically
take on your spouse’s past debt. This is not true. Your credit histories will remain separate for any debts or financial troubles
that occurred before your marriage. New Jersey is a
common law state, meaning that even after marriage you’re only responsible for debt accrued in your name.
This changes once you open joint accounts, apply for joint credit, cosign on loans, or include your spouse on an account as an authorized user. These actions will show up on your credit report and you will be responsible for the debt. If at any point your spouse cannot make payments, even if it is on debt they personally accrued (after the date of your marriage),
you will be responsible for the full payment of the debt.
4. Decide How You’ll Make Purchases Going Forward
Your spouse’s debt, and its impact on their credit score, may make it difficult for you to make big purchases together for the duration of the repayment period. Depending on how much debt they have and how low their credit score is, you may be looking at taking on the full weight of big purchases for awhile. You may be hesitant to apply for joint credit, cosign, or add them as an authorized user on your accounts. Have an honest conversation about how you will make big purchases together going forward.
At
Veitengruber Law, we know the stress of large debt can create a lasting impact on marriages and families. Our experienced legal team can help you sort through the debts and create a future path that looks bright. Our comprehensive approach to resolving debt problems can help relieve the stress on you and your spouse.