Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com.
Dear To Her Credit,
My fiance and I are planning to get married later this year.
I don't have any financial issues -- however, he owes about $7,000 in back taxes
(not including what he is going to owe when he files this year), has a
foreclosure on his record (he still owes $85,000 on that) and owes $3,000 on a
vehicle repossession, which I believe has gone into collections at this point. We also just found out that he has a $55,000 tax lien against him from his
foreclosure. All of this occurred before we met. He is planning on filing for
bankruptcy, but I don't believe that that will do anything about the tax
problems.
My question is: Will this affect me in any way? We live in
California. I have heard about this communal property thing. We don't have any
combined accounts, but we would like to get a joint bank account. Will that open
my money up to garnishment if things go bad? Also, I plan on buying a house
with my sister in the near future. If I do this after we get married, but don't
include him on the loan or deed, will I be affected by his past issues when
trying to buy a home? -- Sarah
Dear Sarah,
You didn't ask if you should marry a man in much worse
financial shape than you are in. But that unasked question is central to this
dilemma. Here's why:
Marrying someone with over $150,000 in back taxes, liens and
other bad debts will affect you. Having
so many debts in bad standing, especially with more apparently popping up all the time, is a very bad sign. He may be the sweetest guy you have ever met,
but his financial life is a mess. He needs to realize that he has to clean it
up before he marries you. Otherwise, he's just dragging you into his financial
disaster.
That doesn't mean his debts from before the marriage will
automatically become yours. They won't. But
if he has run up this many debts in the past few years, how will he keep from
adding to it after you are married? From then on, in the state of California
and other community property states, creditors will be able to pursue you for
his debts.
Furthermore, as a married couple, you should be deciding on financial goals together and working toward them. How will he contribute to
these goals? He's working from a disadvantage here, and he is going to feel
that acutely. No two people getting married are on exactly equal footing, but
it's better if they are a little closer to it than you two are.
Many times a woman thinks she can help a man get on his feet
(or vice versa). But it changes the dynamics of a relationship if one partner
is as needy as your fiance seems to be. Sad experience has taught many people
that it's easy for their relationship to stop feeling less like a partnership
and more like a parent-child relationship. And it's the spouse who feels
inadequate who often starts to also feel insecure or disgruntled in the
marriage.
I hope you wait at least a year, if not two, before you get
married. Give him a chance to clean up his credit score and his back taxes and
other debts on his own. If he's determined to file for bankruptcy, he should
get that out of the way before you get married. (One spouse can file for
bankruptcy alone, but it can get messy.)
If he gets his financial affairs in relative order and you
get married, hold off on getting credit cards, bank accounts or other accounts
with him until he has a clean record for several years. Otherwise, if more
creditors pop up and you have a joint account, you could very well find your
wages garnished by creditors after they are co-mingled with his.
Now, about buying a house with your sister. Buying real
estate with someone other than your spouse doesn't always end well. One party's
situation can change quickly, and then what? If the only way you can buy a
house is to go in together with your sister, and you are sure you want to do
that, then at least go to a lawyer and make sure you're both covered no matter
what happens in the future.
If you buy a house with or without your sister, your fiance's
(or husband's by that point) credit history and score shouldn't be taken into
consideration as long as you don't include him on the loan.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: February 11, 2011
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