Does my husband's debt affect me?
Most states use common law (also known as equitable distribution), which dictates that married couples don't automatically share personal property legally. In other words, you aren't responsible for your spouse's debt unless you took it out together as a joint account, or you cosigned on it.
You can protect yourself from your spouse's debt by signing a prenuptial agreement before you get married and avoid taking out joint credit. It's especially important to protect equity in your home during a divorce to ensure you get your fair share, since this is likely the largest asset you have.
No, you don't. Any debts either spouse had before marriage remain their own responsibility, with one notable exception. If you cosign a loan for your significant other or open a joint account on a credit card before you officially tie the knot, you're both responsible for the debt after your marriage date.
You are generally not responsible for someone else's debt. When someone dies with an unpaid debt, if the debt needs to be paid, it should be paid from any money or property they left behind according to state law. This is called their estate.
If you live in a community property state, you probably will be responsible for debts accumulated by your spouse during the marriage. (These states are California, Texas, Arizona, New Mexico, Nevada, Washington, Idaho, Wisconsin, and Louisiana, while Alaska, South Dakota, and Tennessee make it optional.)
The states that follow community property rules are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Upon your death, unsecured debts such as credit card debt, personal loans and medical debt are typically discharged or covered by the estate. They don't pass to surviving family members. Federal student loans and most Parent PLUS loans are also discharged upon the borrower's death.
Any debt each party may have before marriage remains separate unless the spouse is added as a co-signer. In this case, the so-signer may be liable if the debt is not repaid.
Financial infidelity occurs when one partner hides or misrepresents financial information from the other, such as keeping secret bank accounts or hiding purchases. It does not necessarily involve marital infidelity, though it can lead to divorce.
Community Property State
Fortunately, most states are not community property states so your spouse cannot be pursued for your debts. Currently, there are only nine community property states in the United States: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Can creditors go after beneficiaries?
Sometimes, the decedent leaves behind unpaid debts. If that happens, a creditor could intercept a beneficiary's inheritance to repay the money owed to them.
There are situations in which you may be responsible for your partner's credit card debt. If you have a joint credit account, are a cosigner or are the primary with your spouse as an authorized user, then you are responsible for any debt your spouse accumulates on that account.
Who Is Responsible for Someone's Medical Debt When They Die? Your medical bills don't go away when you die, but that doesn't mean your survivors have to pay them. Instead, medical debt—like all debt remaining after you die—is paid by your estate.
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.
The debt your spouse incurred before marriage remains an individual obligation in most cases. The credit card debt your partner previously racked up is their own, and you won't be legally on the hook to pay it off once you start a relationship.
CA is a community property state. Any property (or debt) acquired during the marriage is presumed to be community property. Community property can be attached for debt or claims accruing during the marriage. So, yes, it can affect your finances, specifically, your community property interests, if your spouse is sued.
A mortgage lives on after the death of the borrower, but unless there is a co-signer or, in community property states, a surviving spouse, none of the deceased person's heirs are responsible for paying the mortgage. Those who are in line to receive an inheritance may be able to take over payments and keep the house.
Similarly, creditors do not have the right to go after the assets of parents, children (for instance, child support), siblings, or any other family members.
For purposes of consumer law, it is fraud for anyone, including a spouse, to apply for credit in your name without your consent.
If there's no money in their estate, the debts will usually go unpaid. For survivors of deceased loved ones, including spouses, you're not responsible for their debts unless you shared legal responsibility for repaying as a co-signer, a joint account holder, or if you fall within another exception.
What happens if you never pay collections?
If you don't pay, the collection agency can sue you to try to collect the debt. If successful, the court may grant them the authority to garnish your wages or bank account or place a lien on your property. You can defend yourself in a debt collection lawsuit or file bankruptcy to stop collection actions.
Loans, medical debt and credit card debt are generally all able to be discharged through bankruptcy. Tax debt, alimony, spousal or child support and student loans are all typically ineligible for discharge.
Credit histories and scores don't combine when you get married. Your credit history and scores are yours and yours alone, and your marital status is not included in your credit reports. But if you have a shared account or you're an authorized user of your spouse's account, you could affect each other's scores.
It's estimated that financial problems contribute to 20-40% of all divorces.
Will I be responsible for student loans my spouse incurred before marriage? In both community property and common law states, all debts your spouse incurs before marriage stay solely their responsibility after you say “I do”—including student loans.
