How to Assume the Debt of a Marriage Partner

In most cases, assuming debt for someone else isn't a wise financial move since creditors will hold you liable for the debt you assume. However, sometimes assuming debt for a marriage partner can be beneficial. For instance, paying off your spouse's creditors can boost his score so that he -- or both of you together -- later qualify for better financing if needed. It may also make sense if your partner has cognitive or physical trouble paying and tracking the debt. The two primary ways of assuming debt for your partner are refinancing and signing an assumption contract with your spouse's creditor.

Instructions

Refinancing

1

Investigate the total amount of debt you will assume so you know how much you need to borrow through your refinance loan.

2

Check the property and debt laws for your state. In a separate property state, you are not responsible for your spouse's debts unless you cosign on those debts. In a community property state, you can be held responsible for debts even if you don't cosign. If you live in a community property state, you may not have to refinance some or all of the debt since the law already considers you liable for any debt your spouse gains during your marriage -- refinancing still would be necessary for debts obtained prior to your union.

3

Obtain a copy of your credit score. Refinancing requires good credit because you are applying for a new line of credit through the refinance loan. The better your credit score, the better interest rate you usually can get. Gather financial information that shows your ability to repay the refinance loan, such as copies of your pay stubs.

4

Shop around at local lenders. Provide them with copies of your credit score, as well as the other financial data you have that supports your ability to repay the refinance loan. Apply for a loan only in your name with the lender that can provide you the best terms and interest rate. Finalize the paperwork.

5

Use your refinance funds to pay off your spouse's debt. At this point, you owe the amount she owed since your name is on the refinance loan. She may still be held liable for this new debt in a community property state, but the lender will approach you first for payment.

Contract

6

Contact the creditor with whom your spouse has a debt balance. Ask the creditor if you can assume your spouse's debt through a debt contract. Some creditors will do this, but others will not. Provide the creditor with documentation that verifies your relationship with the debtor and your financial ability to assume the debt.

7

Write a formal contract that indicates you will assume your spouse's debt. State the amount you are assuming clearly, as well as your full name, contact information, the exact terms for repayment and data about your spouse and the account involved.

8

Sign the contract along with your spouse and turn it over to the creditor. Have the creditor sign the contract and provide you with a copy for your records.