It's June, the month of wedding bells. Yet many a couple are dragging a load of debt down the aisle with them. Are you marrying the debt when you marry the person?
Many people think so but the truth is that you are not liable for your spouse's premarital debts unless you sign on the debt to become liable. However, it still pays to know about your fiancée's financial condition because joint accounts can be seized by creditors, and the IRS can take joint assets and even keep you from buying a home. So if your fiancée is heavily in debt, don't marry your assets together when you tie the knot.
Debts incurred during a marriage are generally only a debt of the spouse signing on the debt. Creditors can take joint bank accounts and some joint assets, but the non signing spouse cannot be held personally liable. For this reason, widows are not liable for many family debts but are often pressured into paying them by unscrupulous collectors. Let dad's debt die with him and let mom keep her money.
Divorce presents another confusing set of circumstances, because the couple will stay married to their joint liability debt even though one spouse may have agreed to pay it in a divorce settlement. However, the divorce decree is not binding on the creditors, who are free to pursue either spouse. So if you have a deadbeat ex-spouse, you'd better count on paying the debt yourself, if you can.
The moral of the story is that while you are married to your spouse, you should not sign on to any debt unless you are required to by the lender, as is the case in most home loans. You should try to keep your spouse free of your liabilities so that if you encounter financial problems your spouse will not be entangled. Many a husband has saved the family finances, and probably his marriage, by keeping his wife from being chased by his creditors or filing bankruptcy.
And if, God forbid, the marriage fails, make a realistic assessment of your ex's ability to pay those joint debts so you won't pay twice: first in the property settlement and then to the creditor.
Our advice is to marry the person, not the debt, and to do the work necessary to live a long and happy life together.
Ron Allen is a Christian businessman, CPA and author who serves in local, national and international ministries, spreading a message of reconciliation to God, to men and between believers. He is founder of the International Star Bible Society, telling how the heavens declare the glory of God; the Emancipation Network, which helps people escape from financial bondage; and co-founder with his wife, Pat, of Corporate Prayer Resources, dedicated to helping intercessors.
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