Why Didn't I Learn This in School: Til Debt Do Us Part


Love your soon to be spouse, but don't love their debt?

Don't worry, the debt they've incurred before you were married does not become yours once you tie the knot.

So what does change?

To start, if you both have incomes, once you're united as one, your expenses will decrease. This dual income will also improve your chances of getting a loan -- so that dream house might be closer than you think.

Other cost-cutting perks? Being able to hop on your spouse's insurance. Both health and car insurance typically offer better rates for married couples. And when it's time to pay the tax man, it can go either way.

Sometimes filing jointly can push the two of you into a higher tax bracket, if both spouses incomes are substantial and close in value. But if your incomes are more unequal, the higher earner can potentially drop into a lower tax bracket because you're just married.

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If you have assets worth protecting, consider a prenuptial agreement.

Not the most romantic gesture, but this little contract will establish who owns what and who is responsible for which debt in case things don't work out.

See, everything you buy or earn as a married couple becomes marital property. This is one reason divorces can get messy.

Sometimes it can all come down to if you live in a common law or common property state. If you live in a common property state, you will be responsible for the debt you and your spouse incur when you're married, now that you're becoming unmarried.

All the other states are common law. If you live here, you're only responsible for debt in your name -- except when it comes to certain household expenses.

So get the facts about you and your partner's finances before marriage because from this day forth, you're both getting that check for dinner.