According to a survey performed by SmartMoney, debt is the most common reason couples fight. A lawsuit over debt could significantly increase the tension between spouses. Spending time learning about the legal implications your debt has on your spouse might help.
Premarital Debt
Typically your spouse is safe from a lawsuit in the event you bring old debts into a new marriage. An exception to this rule is if you add your spouse to the account as a joint account holder. This is true even if you incurred the debt prior to adding your spouse to the account. Be forthcoming about your debt prior to adding anyone to an account, or you may put him at risk of legal and financial threats.
Community Property
If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, you are subject to community property laws. In community property states, most debts incurred by one spouse during the marriage automatically becomes a legal obligation of both parties, even if only one party is aware of the debt. Each state has its own laws regulating debt liability, so take the time to learn the laws of your state.
Common Law
Common law states include all states not considered community property states. In common law states, a debt incurred by one spouse during the marriage does not necessarily become a marital debt. Only the debts incurred for the benefit of the marriage, such as mortgages, furniture purchases and child care costs, are considered marital debts. The creditor may choose to sue either or both spouses in the event of a lawsuit.
Garnishments
Even if your spouse is not held liable for your debts, if you share banking accounts, a creditor can still go to court and have your bank account garnished. The court does not know what portion of the funds in the account was contributed by you or your spouse. To protect your spouse's assets, consider keeping separate bank accounts, at least until your debts are paid off.
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