Editorial Policy

Expert Q&A: Marrying into Extreme Debt

Erica Sandberg

October 11, 2011

QDear Erica,
I just got engaged, but I’m starting to have financial cold feet. I love my fiance, but he’s got $70,000 in student loans from his master’s degree and only makes $50,000! He also has $7,000 in credit card debt from when he was a student, but he swears to me he never had debt before that and was always thrifty. When we get married, will I be on the hook for his old debt? — Justine

ADear Justine,
Chúc m?ng, mazel tov and congratulations on your upcoming nuptials! That’s exciting news. At least it is to me. I wonder if your future spouse’s financial troubles are causing you pause, or if it’s because the idea of getting married at all is daunting. Both are normal reactions. I can’t help with the former, but here’s what you need to know and do about the latter.

First of all, your obligation to debt as well as your rights to property after you get married depends greatly on state law. In general, however, liabilities and assets acquired before marriage belong to the person who brought it into the union. Therefore, the student loans and credit card balances that your fiance owes now are his to pay, even after you walk down the aisle. Legally, you’re almost certainly off the hook. Ask Erica

However, this does not mean that your husband’s problems won’t affect you. They probably will, especially if you plan to do something like buy a home or a car together. The lender will analyze both partners’ financial information and credit reports to decide whether or not you can really afford to finance the item. So if he is earning a very low salary in relation to his outstanding debts, you will be negatively affected.

This doesn’t mean that you have no options. For example, you can apply for the loan in your name only. If you have an excellent income, a high credit rating and can afford the payment on your own, you’ll be fine. Another option is to work on paying the debt down as a couple so you can get what you want together.

Which is better? That’s up to you. My personal and professional opinion is that not everything should be merged just because you get hitched. As long as you’re honest and respectful, do what feels right for you.

There is another, almost more important, matter to cover though, and that’s the way your guy handles money. Long before you slip on that ring, you must (yes, must) discuss financial issues at length and nip problems in the bud.

Pull your credit reports and look at them now. This should not be awkward — this is your life you’re talking about. If there are any more debts that you don’t know about, the reports will reveal it.

After that, discuss the key financial issues that come up in marriages. These are the ones that are apt to cause fights if you don’t understand each other:

  • Spending styles. Is one of you a splurger and the other a scrimper? Come together on shopping habits and decide how you’ll deal with differences.
  • Credit use. For some, owing $100 is a big deal; for others $10,000 is peanuts. Get clear on charging — when it’s OK, and how much debt is too much to handle.
  • Savings goals. What do you want to sock money away for, and how are you going to do it? Find out now.
  • Income plans. Talk about where you each want to be in five, 10 and 15 years. If kids are on the agenda, one of you may want to stay home for a time, which means less cash coming in. Talk about your values as opposed to your net worth.

This is just a start, Justine, but I urge you to get cracking as soon as you can. Both of you should enter into this marriage fully aware of your individual strengths, weaknesses and attitudes. Best of luck to you both!