Is Her Debt Yours When You Get Married?

Walking down the aisle typically is an expensive event. With these costs looming, the prospect of taking on your spouse's debt is hardly attractive. Whether you are responsible for the debt your wife or husband has when you marry depends on where you're located and whose name is on the debt paperwork.

Separate Property States

Most states in America are separate property states. This means that the government doesn't see you and your spouse as a financial unit. Instead, the government considers the debt you and your spouse had at the time of, or after the marriage, individually. In these states, most of the time, you do not take on responsibility for monies your spouse owes when you marry.

Community Property States

A handful of states -- Arizona, California, New Mexico, Nevada, Idaho, Washington, Texas, Wisconsin and Louisiana -- are community property states. These states operate just the opposite of separate property states. This means the government considers you and your spouse as operating together financially. If your spouse has debt when you marry in one of these states, you accept responsibility for the debt when you tie the knot. Should your spouse fail to pay because of financial hardship or because she passes away, creditors may seek payment from you for any remaining balances. They do not always do this because some balances are very small, but they have a right to ask you for the money and, if necessary, sue.

Adjusted and New Debt

Adjusted and new debt is debt that you refinance or take out together while you're married. You might get adjusted debt if you consolidate debts with your spouse under a loan in both your names. A common example of new debt is a mortgage. In most states, you can take on a spouse's debt in these ways if you sign the new loan agreements. This is true regardless of whether your state is a community or separate property state.

The Bottom Line

Because most states are separate property states, you generally do not take on your spouse's debt at marriage unless you sign new loan agreements that encompass old debts. Even though most people fall under separate property laws, the increasingly common practice of jointly signing agreements for homes, cars and other expenses means you should be aware of debt risks regardless of your location. It may be better to keep your finances separate from your spouse's in separate property jurisdictions, unless your credit is poor enough that you otherwise wouldn't qualify for the financing you legitimately need. You are more at risk for being held liable in a community property state, but ultimately, it is up to the creditor to pursue payment from you for what your spouse owes. If a creditor does seek payment for your spouse's debt, you may be able to negotiate with the creditor to lower the interest rate, defer payments temporarily, settle for a lower amount due to financial hardship you can prove or set up a payment plan with a more manageable monthly minimum.