Are You Responsible for Your Husband or Wife’s Debt?
8 MIN READ
Published January 23, 2024 | Updated January 30, 2024
Whether you’re getting divorced or contemplating joining your finances after marriage, it's important to know if you’ll be responsible for a spouse’s debt. 43% of couples in the U.S. combine finances, while 23% keep their finances separate. If you have combined finances, knowing how marital debt is treated in divorce may be even more important.
“One of the top 3 stresses of marriage is finances and debt,” says Teresa Dodson, a financial expert, and the founder of Greenbacks Consulting. “You need to have a team approach regardless of whether you keep finances joint or separate,” she shares.
Whether a spouse pays the debt in divorce will depend mainly on where you live. There are also other factors that will determine your responsibility, such as whether you’re a co-signer. In this guide, we’ll discuss situations where you may be responsible for debt and tips to protect yourself.
Are You Responsible for Your Husband or Wife’s Debt?
If you live in a “common law property” state, you’re only liable for your own debts, with some exceptions, such as when you’re a joint account holder or co-signer. Both spouses are responsible for necessities, such as food, shelter, and the well-being of children. However, how joint and separate debts are treated may vary slightly in each state.
A wife paying a husband’s debt may be common if you live in a “community property” state. In these states, you and your spouse will both be responsible for any debts incurred during the marriage. The states with community property rules are:
- New Mexico
When Are You Responsible for Your Spouse’s Debt
You’re usually not responsible for your spouse’s debt, especially if it was incurred before the marriage. However, there may be some exceptions. We’ve listed the circumstances in which you may be liable for spousal debt below.
You will be responsible for your spouse’s debt if you’re a joint account holder. For example, if you’re a joint account holder of a credit card, you will both be responsible for repaying credit card debt. However, if you’re an authorized user, you have no liability.
You’re also responsible for any loan that you’re a co-signer on. When you cosign a loan, you agree to be responsible for repaying the debt if your spouse doesn’t make payments. Your creditworthiness and finances are on the line if you don’t repay the loan.
Community Property State Laws
In a community property state, debts incurred during the marriage by either spouse are owed by the couple. Even if you don’t sign the paperwork for a loan your spouse takes out, you’ll be held responsible for the debt.
Any debt owed before the marriage won’t become a joint debt. However, the spouse pays debt if it’s incurred during the marriage.
Other State Laws
Whether you’ll be responsible for your spouse’s debt will also depend on state laws. Some states have more nuanced ways of analyzing and evaluating debts during divorce.
For example, in Texas, the law requires that marital liabilities and property must be divided in a “just and right” manner, which may not always be a 50-50 split. Be sure to check what your state’s laws say about a wife paying a husband’s debt.
What Happens to Debt When You Divorce?
Your legal responsibility for your spouse’s debt, when you divorce, depends on whether you signed any prenuptial agreement and on state laws. Regardless of where you live, you’ll be liable for repayment if you have a joint account or a co-signer on a loan.
If a spouse has individually incurred a debt, they’ll usually be responsible for it. A divorce judge will ultimately split the marital assets and debts of a couple. For example, in a community property state, a judge may decide to award more assets to the spouse with higher debts if it is determined fair or if the debt was for the benefit of the household.
What Happens to Debt If Your Spouse Passes Away?
A surviving spouse may inherit the debt of a deceased spouse if they’re a co-signer or joint account holder or if they live in a community property state. Generally, any outstanding debt of a deceased spouse is covered by the assets and money in the estate.
If there are no assets or if the estate can’t cover repayments, you may not be responsible, and the debts remain unpaid. Typically, debt collectors can’t come after brokerage accounts, retirement accounts, and life insurance policies.
What Happens to Debt When Your Spouse Goes Bankrupt?
If you live in a community property state and your spouse files for bankruptcy, lenders can collect debts from you. However, they can’t collect against community assets, only your separate property, as per the “limited community property discharge” protection.
If you have any joint debt and your former spouse files for bankruptcy, it will eliminate their liability for the debt, but you’ll still be responsible for repaying it if you haven’t filed for bankruptcy.
5 Ways To Protect Yourself from Spousal Debt
When dealing with a spouse’s debt, there are a number of strategies to protect your financial interests. We also recommend speaking to an attorney to discuss how to protect yourself during a divorce.
1. Maintain Separate Accounts
In the long run, the best way to protect yourself is by maintaining separate accounts. If you don’t want completely separate finances, consider a joint account for shared expenses and a separate account for personal spending.
2. Consider a Prenuptial Agreement
While it’s often a difficult subject to discuss with your partner, a prenuptial agreement can help keep debts and assets separate and protect each spouse in case of a divorce. Once a prenup is signed, it can shield you against any debts your partner racks up.
3. Consider Debt Consolidation as a Couple
If you have shared debts, it’s best to consider debt relief before you file for divorce. Shared debts must be repaid, even if you decide to go your separate ways. It’s best to clear these debts beforehand to ensure there are no financial difficulties during the divorce proceedings.
Consider debt consolidation to combine all your shared debts to simplify repayment. This may also help you pay off your debts sooner.
4. Plan and Communicate
The best strategy is to talk about finances and debt before marriage to fully understand each other’s financial goals. Money is not an easy discussion, but it’s necessary to avoid misunderstandings later.
Be open and honest about your income, expenses, debts, and your repayment plans. Discuss how household expenses will be divided and how you’ll pay for major expenses. Iron out other issues as they arise after marriage. We also recommend nonprofit credit counseling as a couple to get guidance on how to budget and manage debt.
5. Build Individual Credit History
While you and your spouse will have separate credit scores and histories, having a joint account or being a co-signer can impact your credit score. Your spouse’s credit problems can also impact you when you’re trying to get a loan together.
Focus on building your own credit history and keep a close eye on all joint loans and accounts to see how they’re impacting your credit score.
Seek Professional Advice To Check if You’re Responsible for a Spouse’s Debt
Finances in a marriage can be complicated. These complications can multiply when one partner has a lot of debt that impacts the marriage. Whether you’re responsible for your spouse’s debt will depend on your state laws.
When navigating complex debt and divorce situations, it's best to speak to a lawyer to learn more about a wife paying a husband’s debt. We also recommend taking action as soon as possible by speaking to a credit counselor to find the best debt relief option to become debt-free.