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,
I recently married and discovered my spouse is $20,000 in
debt. Some of it is credit card debt, and some is from buying a time share. I
live in California, and he lives in Colorado.
Would I ever be responsible for any of his debt? What if we
file a joint tax return? Should he not pay or die with all the accumulated
debt, would I be responsible? Presently, we have not moved in together. -- Cassandra
Dear Cassandra,
It sounds like what bothers you the most about this debt is that your husband didn't tell you about it. Either you and your husband never laid down all your financial cards before you got married, or you thought you did, but he was hiding a couple of unpleasant cards under the table. I don't blame you for being upset -- learning about a $20,000 debt soon after the wedding would be a rude shock.
Let's keep it in perspective, however. While $20,000 is a lot of money, as credit card debt goes, it's (unfortunately) not out of the ordinary. The average household in America with credit card debt owes almost $16,000. And at least the time share debt is connected to an asset -- one he could sell if necessary.
You should not be responsible for this debt. California is a community property state, but Colorado -- where the debt originated -- is not. Even in community property states, getting married does not automatically make you responsible for debts incurred before the marriage. Nor does his debt show up on your credit history as long as he does not add you to the accounts.
Filing a joint tax return does not change who is responsible for a debt. In fact, the existing creditors do not have access to current and future tax returns, so they can't use them to decide who to pursue for repayment.
If your husband should die before he pays off this debt, his estate (his share of everything the two of you own) will pay it. To the extent you are the beneficiary of his estate, the debts reduce the amount you receive. If his estate doesn't have enough money to pay the debts, you generally are not liable.
State laws are complex, however. Just because two states are community property states, for example, doesn't mean they handle every situation identically. In the event of a death, or even before if you are concerned about it, you should get qualified legal counsel to help protect your interests.
Even though you're not responsible for pre-existing debts, they will affect you. Most couples combine finances, and there's a lot less to combine than you thought when you said "I do."
He could have avoided this stress by telling you about his debt before you got married. He may have been embarrassed about it and purposely avoided talking about it. Or maybe he kept meaning to bring it up and he never found the right time (it's hardly a romantic topic!). It's possible he just didn't think it was important. Everybody has debts, he may have reasoned, so what's the big deal?
The most important thing you and your husband should learn from this experience is how important it is from now on to be open and honest about finances with each other. No two people have exactly the same expectations and values regarding money, so it's no shock that you two didn't. What matters is that you take the time now to get a good start going forward. Share your goals and dreams. Agree on how you will spend money; for instance, promise that neither of you will spend over a certain limit without consulting with the other. Work together as a team.
Congratulations on your wedding, and I hope you have a long and happy life together!
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: September 24, 2010
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Should one spouse take on full debt load? – A married couple with joint card debt wants to transfer the balance to a lower rate card. Should the better credit score spouse take on the burden alone? ...
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