Marital Debt Responsibility

Married couples often join their finances together after getting married. This can help them build their life together, buy a house, and save for the future. However, married couples also take on financial debts during the marriage. The couple is responsible for paying off those marital debts.

Marital property and marital debt depend on state law. A local family law attorney can explain your legal options for handling your marital debt responsibilities. For more information about marital debt responsibility in marriage or divorce, talk to an experienced family law attorney.

What Is Marital Debt?

Debt is money you owe from taking out loans, buying things on credit, late fees, and other financial liabilities. When you get married, you can own property jointly as marital property. Spouses can also take on financial debt together as marital debt. Marital debt can include:

• Home loans
• Auto loans
• Joint credit card debt
• Cosigned personal loans
• Medical debt

Borrowers are legally responsible for paying their debts. Any jointly held debts of a married couple are marital debts. Both spouses are liable for marital debts.

The law treats marital debt differently depending on your state, the type of debt, and when you and your spouse took on the debt.

What Is the Difference Between Community Property and Separate Property?

States generally take one of two approaches to marital property and marital debt. Some follow common law for separate property, and others follow community property laws.

In common law states, the property acquired by each spouse during a marriage is their own property. If you buy a house with only your name on the title, it is your home. If you and your spouse put both of your names on the title, you both own the property. If you and your spouse cosign on a loan, you have shared debt.

In community property states, the property acquired during the marriage is marital property. Property before the marriage is separate property, as is inheritance money and gifts to one spouse. Each spouse owns the property they gain after they marry. If you take out a loan during the marriage, it is generally joint debt.

Does Marriage Make You Responsible for Your Partner’s Debt?

If your partner has debts before the marriage, these generally remain their separate debt after marriage. Marriage doesn’t make you retroactively liable for their credit card debts, student loans, or auto loans. However, you may be liable for your partner’s debt if you are a cosigner on a loan.

During the marriage, debt can depend on whether you live in a community property state or common law state. In a community property state, both spouses are generally liable for a car loan taken out during the marriage. In a common law state, a personal loan in one spouse’s name may be a separate debt.

Are You Responsible For Your Spouse’s Student Loan Debt?

Student loan debt is a big concern for many young couples looking to get married. Many couples took on student loan debt before getting married. Generally, student loans taken out before the marriage are separate debts. If you get married, you won’t be liable for your spouse’s earlier loans.

However, you and your spouse may decide to refinance the loans for a lower interest rate. If you cosign on your spouse’s refinanced loan to get a lower rate, you will take responsibility for the debt. This can also affect your credit score.

Can Your Spouse Take Money From a Joint Account?

Most joint bank accounts allow authorized users on the account access to the money. With an “or” joint account, either account holder can put money in or take money out of the account. If you create a joint “and” account, both account holders must agree to access the funds in the account. Talk to your spouse about what kind of joint credit card and bank accounts you want.

Can You Clear Marital Debt With Bankruptcy?

Bankruptcy can be a way for you to clear up a lot of your marital debt so you can begin rebuilding your life. You can file for bankruptcy alone, or you can file for joint bankruptcy. It can be less expensive to file for joint bankruptcy. However, one spouse filing allows the other spouse to keep a better credit score. Your choice of debt relief can depend on the types of debt and assets.

If you file joint Chapter 7 bankruptcy, your marital assets will be used to pay off your marital debt. Lenders and creditors will get some of the money back, and in the end, any remaining debt is discharged.

Not all debt is dischargeable in bankruptcy. Generally, student loans and child support debt do not go away after bankruptcy.

What Happens To Marital Debt in Divorce?

In a divorce, the couple divides their marital property and debt. You and your ex can agree on dividing marital debt in your separation agreement or divorce decree. If you can’t agree, a family law judge will decide. What happens to marital debt in divorce depends on the state. States generally follow equitable distribution or community property rules.

In equitable distribution states, the court uses several factors to divide up property and debt fairly. This is not necessarily a 50-50 division of debt. The court can take into account each spouse’s finances, financial obligations, age, and other factors.

In community property states, the court equally divides marital debt. The separate spouse’s debts stay with the individual spouse. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. For more information about marital debt in divorce, talk to a divorce attorney.

What Happens To Marital Debt if My Spouse Dies?

When someone dies, estate laws determine what happens to their property and debts. Any separate debts are generally paid out of their estate. Creditors can’t go after the surviving spouse. A spouse is not responsible for their deceased spouse’s individual debts.

Marital debt continues after one spouse dies. For example, if you bought a house together and cosigned as a borrower, the mortgage is part of your marital debt. If your spouse dies, you are still liable for repayment of the mortgage.

How Can a Family Lawyer Help?

Handling marital debt can depend on where you live, what you owe, and your individual situation. A family law attorney can explain your legal options and help you handle your marital debt responsibilities. For answers to your questions about marriage property and debt laws in your state, contact a local family lawyer.