Debts you and your spouse incurred before marriage remain your own individual obligations—but you'll share responsibility for debts you take on together after the wedding.
Do You Inherit Debt When You Get Married? No. Even in community property states, debts incurred before the marriage remain the sole responsibility of the individual. So if your spouse is still paying off student loans, for instance, you shouldn't worry that you'll become liable for their debt after you get married.
Since California is a community property state, the law applies that the community estate shared between both individuals is liable for a debt incurred by either spouse during the marriage. All community property shared equally between husband and wife can be held liable for repaying the debts of one spouse.
Keep separate bank accounts, take out car and other loans in one name only and title property to one person or the other. Doing so limits your vulnerability to your spouse's creditors, who can only take items that belong solely to her or her share in jointly owned property.
In common law states, debt taken on after marriage is usually treated as being separate and belonging only to the spouse who incurred them. The exception are those debts that are in the spouse's name only but benefit both partners.
The bottom line. You are generally not responsible for your spouse's credit card debt unless you are a co-signor for the card or it is a joint account. However, state laws vary and divorce or the death of your spouse could also impact your liability for this debt.
Fortunately, your spouse's past credit history has no impact on your credit profile. Only when you open a joint account will any information be shared on both of your credit reports. However, when you want to buy a home together, your spouse's negative credit history could impact your mortgage rates.
The relevant information to focus on here is that California is a community property state, which means that legally married couples jointly own everything – including debt. As a result, it is possible for a creditor to garnish a spouse's bank account if their spouse owes a debt.
When deciding whether to pop the question ― or agree to a proposal ― it's important to consider how debt can alter the relationship. From a legal standpoint, bringing debt into a marriage doesn't mean the other spouse becomes liable for it. That remains the responsibility of the person who accumulated it.
By eliminating debt before getting married, couples set themselves up for a happier and stronger marriage. The couple that pays off debt together might be the couple that stays together since the process of paying off debt can bring them together.
Marriage affects your finances in many ways, including your ability to build wealth, plan for retirement, plan your estate, and capitalize on tax and insurance-related benefits. State and federal laws on these subjects provide default positions.
In many states, some IRS-designated trust accounts may be exempt from creditor garnishment. This includes individual retirement accounts (IRAs), pension accounts and annuity accounts. Assets (including bank accounts) held in what's known as an irrevocable living trust cannot be accessed by creditors.
A judgment debtor can best protect a bank account by using a bank in a state that prohibits bank account garnishment. In that case, the debtor's money cannot be tied up by a garnishment writ while the debtor litigates exemptions.
Couples filing jointly receive a $24,800 deduction in 2020, while heads of household receive $18,650. The combination of these two factors yields a marriage bonus of $7,399, or 3.7 percent of their adjusted gross income.
Joint Credit Card Debt
In most states, in a divorce, both parties will likely be responsible for credit card debt on a card held jointly. This applies even if one spouse was the one who used it the most, or made the payments.
At common law, the spouse – typically the husband – was legally liable for the support of the other spouse. This right could be enforced on the spouse, either by the other spouse or by third-party creditors.
If you live in one of the community property states – Arizona, Wisconsin, California, Washington, Idaho, Texas, Louisiana, New Mexico or Nevada – the law treats all the money you saved as being equally owned by both of you.
In households where one spouse shoulders all of the financial responsibility, that spouse is typically the husband. It is also common for wives to handle bill paying and shopping while husbands manage the big picture planning, such as retirement accounts, insurance and tax planning.
Key Takeaways. Honesty about money is essential for trust in a marriage. Couples can manage their money with separate accounts, a joint account, or some combination of the two. Separate accounts help avoid arguments but take more planning, and you may lose out on the best way to manage your family money.
The first step to stopping debt collectors from calling you is telling them the 11-word phrase - “Please cease and desist all calls and contact with me, immediately.”
Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that. Under state laws, if you are sued about a debt, and the debt is too old, you may have a defense to the lawsuit.