Getting married? Many couples dealing with debt, study finds

Experts offer ways to tackle one spouse's unpaid bills as a newly wedded duo

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

A partner’s old debt can take a toll on a relationship

Many of the couples saying “I do” this summer won’t start their marriages with a financial clean slate – and that could lead to some big arguments down the line.    

According to Fidelity Investments’ “Couples and Money” study, more than 50 percent of couples begin their relationships weighed down by a partner’s old debt.

When broken down by age groups, 74 percent of millennials said one partner brought to the marriage a hefty amount of debt, usually student loan or credit card debt. Among Gen X and boomers, 64 percent and 39 percent respectively said they were walking down the aisle with one spouse carrying a trove of unpaid bills. 

Roughly 40 percent of the surveyed couples surveyed that started a relationship in debt admitted that it was having a negative effect. For example, paying down the debt can take a bite out of a couple’s income and lead to fights over how to manage joint finances.

“We see over and over that dealing with debt is one of the biggest stressors in day-to-day life,” Fidelity’s Alexandra Taussig said in a news release.

See related: Mine, yours and ours: Marriage and your money

Talk about finances before you walk down the aisle

Before you tie the knot (and tie together your financial lives), experts say you should know each other’s fiscal and credit profiles.

Partners must talk about money, credit and debt before, after and during the wedding process, Mike Sullivan, a personal finance consultant in Phoenix, says in our story titled “Don't say ‘I do’ to bad credit.”

Once couples start to merge their old lives into a shared financial future, they often find that one partner’s debt can impact both parties. Depending on how much money is owed, one partner’s debt may derail long-term goals, such as buying a new home or saving for retirement.

In addition, leftover debt can prevent a couple from going on vacation or spending money on entertainment, especially if a big share of the couple’s income is going toward paying down balances. 

One partner’s bad credit score also can make it harder to buy a home or finance other big expenses. 

First the good news. “If you marry, it’s not going to hurt his credit score,” New York bankruptcy attorney Edward E. Neiger told our “To Her Credit” columnist Sally Herigstad for a column titled “How bad credit affects a marriage.”

There’s no such thing as a joint credit score, and the negative items from the past on your credit history cannot somehow work their way over to his report just because you marry. 

Now the not-so-good news: Any time you and your new husband apply for credit together, your credit history will affect you both. Say you want to buy a house together. “If the banks require two incomes to qualify, you might not be able to buy the house,” Nieger added.

If a couple chooses to put their loans in just one person’s name, that could lead to additional problems – including leaving one spouse without a robust credit history. 

See related: 7 smart money moves to make before you marry

Work as a couple to tackle a spouse’s balances

If your love interest is carrying some financial baggage, don’t give up. Debt doesn’t have to be a romantic or marriage deal breaker. 

“It’s not the debt you bring into the relationship that matters, but how you work together to handle your debt over the long run,” Taussig says. 

How should couples deal with one partner’s debt? Work together to come up with an action plan – both for the debt and for any additional loans you may have been planning to take out as a team – and set goals that are realistic and achievable.   

Sometimes a spouse’s debts will come to light years after you married. Our columnist, Erica Sandberg, gave this advice in a column titled “How to cope when a spouse's secret debt comes to light”:  “As a duo, you need to develop a plan to repay the balance in full, in as short a time as possible. Contact the credit card companies and explain that you want to pay them off ASAP.

“Develop a budget, reduce spending, apply all excess funds to the debt and suspend charging privileges until the balance is at zero. Also, I don’t think it’s out of line to have your husband relinquish and sell whatever stuff he bought on the cards and apply the proceeds to the balance. While you’re at it, propose he work overtime or get a part-time job to expedite the process.”

Moving forward, Sandberg suggests, “Begin to talk about money on a regular basis. What he does with his financial affairs affects you and vice-versa. Make time in your marriage for consistent and frank financial discussions.”

Taussig agrees. “Openly discussing financial matters helps people feel more confident, more closely aligned and better equipped to take on the future,” she says.

See related: Couples sharing finances? There are apps for that


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Updated: 11-16-2018