(Closed) Finance and Marriage: questions, debt, loans, credit scores…

posted 7 years ago in Married Life
Post # 3
Member
1854 posts
Buzzing bee
  • Wedding: December 2009

It probably depends on the laws where you live… I would contact a lawyer to get the real answer to your questions, because answers here would not necessarily be true for you and this is soo important… You don’t want to be mislead..

Post # 4
Member
14186 posts
Honey Beekeeper
  • Wedding: June 2009

Well this depends on lots of things.

1) I don’t know how this works. If you try to buy something together, like a home, I can’t imagine that his bad credit wont’ affect you also.

2) if my SO had unpaid loans and debt and i didn’t, no, i would not pay his debt and loans for him. I don’t care if we’re married–money is not a free ticket to being debt free and I’d rather wait until he gets his ducks in a row.

3) Why would he take out a loan or new debt after we are married? Are we talking a new car (in which case, no, i would not pay for his car–i am actually saving up for my own car right now) or a personal loan?

Your post almost implies your SO is not in the best place, financially speaking. I would be concerned if i were you. Look into it and try to help your FI find a his financial footing. Because when you have kids, well, that’ll just be a big mess if he’s having too much money trouble. I don’t see how it won’t suck you down with him.

Post # 6
Member
11327 posts
Sugar Beekeeper
  • Wedding: February 2011

To the best of my knowledge: 

1) your credit score will not drop automatically by marrying him, however

2) If he has unpaid bills and his creditors catch wind he got married (and, THEY WILL), they will then come after you and if you don’t work with them to get them paid, then it will hurt your credit score

3) yes yes yes yes yes. any debt earned during the marriage will be BOTH of your responsibility. even if you don’t know he’s doing it. even if you told him not to. even if anything. 

That being said… depending on what state you live in, a prenup *may* be able to help you. I would see a family attorney and talk to them about protecting your financial interests. 

Post # 7
Member
14186 posts
Honey Beekeeper
  • Wedding: June 2009

Hmm. i’m not sure. I think there are ways to keep money 100% separate. But in a few years, after showing he’s making good financial choices, his credit should bounce back up and he’ll be better off.

I’d imagine, too, that if you sign for a car, your spouse just doesn’t get shafted for it. I’m sure there are laws to protect the spouse when you keep money separate and one person is irresponsible (i can imagine sitautions where one person is a bum and goes and gets a luxury car then screws his/her spouse over).

When you do your taxes, just do them separately. When we filed jointly we were curious how that’d work since we lived separately for the first 6 months of our marriage. If he’s legitimately living somewhere else, you can definitely do that.

But yeah, we had separate addresses. I lived in Stl and he lived in GA.

Corgi suggested a prenup and I think this would be an ideal situation….you can sign one and if anything happens and collectors come after you, it may help you avoid his problems

Post # 8
Member
837 posts
Busy bee
  • Wedding: October 2010

What kind of debt does he have? Student loans, or did he rack up a bunch of credit cards and not pay them on time?  To me there is a difference.  In your first post it sounded like the latter but in your second comment is seemed as though he had his act together.  I’m not trying to be judgmental, so please don’t take it that way, but if you two buy  house together and it’s solely in your name and solely yours then you aren’t buying it together.  I understand if he has a bad credit score why this would be so, but if he’s contributing money to the house it puts him in a really bad situation if something were to ever go wrong.  I would seriously consider making him the beneficiary of the house if anything were to ever happen to you.

Post # 9
Member
529 posts
Busy bee
  • Wedding: October 2009

Okay, so I’m obviously not an expert, but this is what I believe to be true (but please don’t take my word on it):

If you have good credit and your SO has bad, does his credit score affect yours once married?

I don’t believe his credit score affects yours at all.  His debt, loans, credit cards, etc. are still in his name only, regardless of whether you are married or not.  Your debt, loans, credit cards, eetc. are still in your name only.  Unless you have cards that belong to both of you, or loans that belong to both of you, you won’t affect each other’s credit score.

When/if you decide to buy something TOGETHER, both your credit scores will be checked, and so his bad credit score will affect your together purchase or whatever.  When my SO and I went to buy a house (before we were married), his credit score is what dictated our interest rate, because his credit score was worse than mine.  But if you were to buy a house under just YOUR name, then his credit score shouldn’t be an issue.  After my husband and I got married, we decided to buy me a new car.  Since I knew my husband’s credit score wasn’t great, we decided that only MY name would be on the car loan.  Only my credit score was checked, and they said my credit score was still great, so I’m assuming my husband’s credit score did not affect mine at all, otherwise my car loan wouldn’t have been so good.

If your SO have unpaid loans and debt and you have a clean bill, once married does his debt and unpaid loans become your problem as well?

I think these depend on the loans and stuff.  I know some debt gets passed on to immediately family (once deceased) while other loans doesn’t.  But his debt would probably only be your problem if he passed away, and then it might be your responsibility to pay them, depending on the loan/debt, etc.  Does that make sense?

If he takes out a new loan or accrues new debt after married, is that now your problem because you were married before the new loan/credit/debt?

I don’t believe that’s the case.  Like I mentioned earlier, I was able to take out a car loan after my husband and I were married, and they only checked my credit score.  I assume if we check our credit information, the loan would appear on my credit report, and not on his, since he has nothing to do with the loan.

I think that if you want to keep all your finances separate, you can, though if you or your husband were to die, I believe the other would be left with the burden, depending on the nature of your loan/debts/etc.

Hope that helps!

Post # 10
Member
11327 posts
Sugar Beekeeper
  • Wedding: February 2011

@ejs– you’d be a little surprised about how easily a spouse can get shafted financially. at least in ohio, if you don’t have legal documents keeping your money separate (prenup), ANYTHING your spouse has or does can bite you in the ass. Like even if your spouse has a gambling problem and runs up 30k in cc bills without you knowing on a secret card in ONLY their name? you’re still f’d. Laws suck that way 🙁 

Post # 11
Member
339 posts
Helper bee
  • Wedding: July 2011

I agree with egb – I would definitely contact an attorney, probably a family law attorney, to receive answers to all of your questions, especially if you are concerned about your SO’s spending habits. 

I’m unsure about the other questions, but I know in the state where I live, all debt incurred prior to marriage remains the responsibility of the person who made it – but all debt incurred during marriage is the responsibility of both parties.

Post # 12
Member
14186 posts
Honey Beekeeper
  • Wedding: June 2009

@Corgi, that blows. Then again, i guess changing the law to protect the spouse sets up a lot of ways for people to manipulate it = Can’t win.

Seriously though, if Dh and I had had some big money problems or major discrepancies, you’d bet I’d have had a prenup. Money makes me nervous.

Post # 13
Member
287 posts
Helper bee
  • Wedding: August 2010

i would consider getting a prenump. it specifically separates and defines both debt before and after marriage (as there is both individual debt and marital debt once you’re married; car for himself = individual, house titled by both = marital). i would highly consider it just because it lays it all out in black and white. also and perhaps more importantly for your case, just going through the prenump process allows you to talk all these issues through – not just the factual you have X and i have Y but also talk about values and beliefs around money and financial planning etc.  prenumps also specify that they override the laws of whatever state you are living in at the time of separation, so you wouldn’t have to worry about different state rules if you move around.

Post # 14
Member
3762 posts
Honey bee
  • Wedding: May 2010

I wouldn’t count any any of the advise here (including my own) as the law.  These are serious questions that could really effect your future.  Get some real legal help.  The biggest concern is whether or not you live in a Common Law Property State or a Community Law Property State.  Here is a brief explanation on the difference of the two: 

“States fall into two general categories as to how they divide marital property:  community property states and common law states.  Generally, in community property states the courts primary objective is to simply divide the property between the spouses (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington).   In common law states property is divided based on principals of equity or overall fairness.”

My personal response your questions:

1)  Credit Scores:

 I agree with others that although they don’t “average” the two scores when you are married, if you go to buy anything together they will look at the lowest of the two. 

2) Unpaid Debt

No, his debt will not become your debt however, you may get harrassed (which is illegal) if they know you are married.

3) New Debt

This really depends on what type of state you live in.  More than likely though, yes, any debt he takes out (even in only his name) you could be held liable for. 

 

Obviously when married, you can file your taxes seperately and there are ways to keep your finances “essentially” seperate.  However, I think there are many loopholes to the laws with this if you are married.

I would be careful that if you buy a house, even if your name is the one on the deed, if his support/finances help pay for the house in any way (repairs, mortgage, utilities, etc) many states would consider it common marriage property. 

If he goes out and buys a car (with a loan) then you probably will be liable for that debt as well. You should trust your partner and make financial decisions together. 

 

Post # 15
Member
134 posts
Blushing bee
  • Wedding: July 2010

Not to be a downer but all things aside are you sure you want to marry this guy?  Saying things like “my financial future” “his debt” “keeping seperate addresses”, it sounds like there might be some deeper issues going on than the debt.  Marriage is about a union between two people and I am saying this purely about what you have said in this post but it sounds like you and your guy need to sit down and have some serious talks about your future.

Post # 16
Member
524 posts
Busy bee
  • Wedding: December 2009

A few of the posts in this thread are wrong on several points.  I don’t know why people who’ve never stepped foot into a property or family law classroom feel the need to increase their post count.  I actually know a bit more about this because I have studied this, but I am NOT a licensed attorney (yet), I do not live in your state, and you should take this as a general outline of the rules of separate property rather than legitimate advice.

Both NJ and NY are common law aka separate property states.  I’m not going to look up the specific states’ laws, because that would get too far into specific advice, but I’ll tell you a bit about the general rules of separate property states.  The general rules may be modified by statute or judicial decision in your states, which is why if you have real concerns rather than general curiosity, you need to talk to someone there.

1) Your personal credit score will not be impacted by his personal credit score.  The two are completely separate.  I’m sure of that.  I’m not sure of this:  If you try to buy a house with both of you on the application, I imagine they would look at his as well as yours, and this would hurt you both.

2) Re:  Debts prior to the marriage.  Absolutely not.  Both property and debt acquired prior to the marriage remain separate property.  His creditors can only reach property that is his.  If it is an issue, I would recommend keeping your bank account with your savings separate.  You can open a joint account if you want, but keep the extent of your assets in it limited, because his creditors would be able to reach it.  If you add him as a joint owner of your separate bank account, you give him the right to use the whole.  Thus, his creditors would be able to reach money that was once yours alone.  This does not happen immediately upon marriage, you have to choose to do it.  I would recommend that you don’t add him as a joint owner of anything or deposit many of your assets into a joint account before consulting an attorney.  Whether separate creditors can reach only half of the money in a joint account or all of it depends on the specific state where it is owned, and I’m not going to look up the specific state rules.

3) In a separate property state, property and debts accrued during a marriage remain separate, with exceptions.  Say you both work and both deposit your earnings into separate accounts.  Then, you buy yourself jewelry with it and he buys himself a fancy watch.  Then, your bank account and the jewelry are entirely your separate property, and his bank account and his watch are entirely his separate property.  If either owes money on the jewelry or watch, creditors can’t go after the separate assets of the other.  But, if you own a joint account, the watch creditors could go after the joint money either up to the half or whole (depending on your state, see immediately above).

There are some exceptions.  (a) You can choose to acquire personal property or loans jointly.  You could do this by depositing earnings into a joint account, purchasing things using money held jointly, or taking out a loan jointly.  This is not the default and it’s something you have to choose.  (b) There is probably an implied joint ownership of debts accrued in furtherance of both of your purposes–like a house purchased after the marriage, or a car frequently used by both of you, or food–the marital necessities, even if these debts are accrued in one of your names only.  If this weren’t so, it would be too easy for spouses to collude to avoid creditors–this is why I think it probably exists.  If you take out any joint debt, or he takes on separate debt in furtherance of some marital purpose, you would be liable, even from out of your separate property, for up to the full amount.

And if you ever move to California, Texas, or one of those other community property states, ALL of this becomes screwed up.  I don’t want to and won’t go into that.

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