I’m a Family Law Attorney: 3 Things You Should Know About Marrying Someone With Debt
Getting married can be one of the most joyous occasions of your life, but it can also be one of the most overwhelming. Not only are you entering into what many people consider a spiritual union, but you are also entering into a legal one.
Tying yourself financially to another person can be costly. In order to protect yourself and your future, it is strongly recommended that you speak with a financial and legal advisor.
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At GOBankingRates, we asked family law attorney Cynthia Hernandez to provide some insight on what prospective spouses should think about before saying their nuptials. She said, “Marrying someone with debt involves critical legal and financial considerations, an area where I frequently provide guidance through my experience in family law at Hernandez Family Law & Mediation. Dealing with such scenarios requires not only an awareness of the legal implications but also proactive financial strategies to protect both parties.”
Here are the three things she said you should know about marrying someone with debt.
Consider Collaborative Planning
Hernandez explained, “In practice, I’ve observed several couples benefit from collaborative financial planning prior to marriage. For instance, a client in Florida, where laws deem any debts incurred during marriage as shared responsibility, benefited significantly from our pre-marital financial session. We secured a clear understanding of each individual’s financial liabilities, and drafted a prenuptial agreement that outlined the handling of these debts, mitigating potential future disputes and financial strain.”
Transparency is often critical in these situations. A SunTrust Bank Survey reported on by CNBC, said that “35% of people blame finances for the stress they experience in their relationships.” The same study found that 3 in 5 people have thought about waiting to get married so they wouldn’t take on their partner’s debt. Over half of the respondents (54%) even said their partner being in debt was a “major reason to consider divorce.”
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Know Your Laws
“The state you reside in plays a crucial role in how debt is managed within a marriage,” said Hernandez. “For example, in community property states, most debts acquired by either spouse during the marriage are owned jointly. However, in common-law states, you’re typically not responsible for your spouse’s individual debts. Knowing these legal nuances can dramatically influence your financial planning. During my tenure, advising clients about their specific state’s regulations has been key before making any commitment or financial agreement.”
According to consumer credit reporting company Experian, debts acquired before marriage will typically remain the responsibility of the person who incurred them. An exception to this is if you or your spouse co-signed or co-borrowed the loan. Then, you would both be responsible. Debts taken on after marriage, on the other hand, are dealt with differently depending on state law.
Communication Is Key
“Lastly,” explained Hernandez, “communication is imperative. In my legal experience, couples who regularly discuss their finances and set mutual goals tend to navigate financial challenges more effectively. For instance, setting up an agreed proportion of income to tackle existing debts, and deciding on spending limits can create disciplined financial habits, crucial for marital harmony. These steps not only help in managing debt effectively but also in building trust and partnership in other aspects of the marriage.”
It is no secret that finances are one of the most common things couples fight about. A study by Ramsey Solutions found that it was, in fact, “the number one issue married couples argue about.” The study also found that the more debt married couples were in, the more likely it was an issue they would fight about.
However, having common financial goals and healthy conversations about money tend to have a positive impact on a marriage. Over half (54%) of people who said their marriage was “great,” said they “talk daily or weekly” with their spouse about money, compared to less than one-third of those who report their marriage as “okay or in crisis.”
Incredibly, 94% of respondents who described their marriage as “great” also said they “discuss their money dreams together.” Communication about money seems to prove essential to protecting yourself and your marriage.
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This article originally appeared on GOBankingRates.com: I’m a Family Law Attorney: 3 Things You Should Know About Marrying Someone With Debt
