“Should I help my spouse pay off their debts?” “Am I responsible for my spouse’s debt?” “What happens to his debt if our marriage goes south?”
These are all common questions I get from couples. In my experience as a Certified Financial Planner™ and Certified Financial Therapist-I™ Practitioner, debt can drive a wedge between spouses more than any other financial issue.
The impact of debt on a marriage goes far beyond the balance sheet – it often impacts the marriage itself.
But, it doesn’t need to be this way. In this article, we will discuss ways that your spouse’s debt will impact you, including whether you’re responsible for their debt. At the end, we’ll discuss best practices for how couples handle each other’s debts.
(If you’d prefer to listen to this article, you can get a podcast version of this post here: Money and Marriage Podcast Episode 142 – Am I Responsible for My Spouse’s Debt?)
Your Spouse’s Debt Will Impact You
“How are things going to change about the way you manage money after you get married?” I remember asking Edward and Elizabeth in our final meeting before they tied the knot. (As always, names are changed to maintain confidentiality).
“We will be able to start combining finances and managing money together,” Edward replied. “We can consolidate our savings accounts, operate out of the same checking account . . .” he paused. After a moment, he said, “Maybe Elizabeth can help me finish paying off my student loans so I can start contributing more to our household finances?”
Elizabeth visibly pulled back. “Well . . . it’s his debt,” she said. “I don’t think I should need to pay it.”
Here’s the thing: Edward’s student loan debt was not Elizabeth’s legal responsibility. (We’ll discuss that more in a moment).
But his debt did impact her.
“It’s not my debt, so it’s not my problem” is an incredibly common sentiment in couples today. This is especially true for newly married couples where one (or both) spouses incurred significant student loans or other debt before getting married.
The “easy” answer in the short term is to say that your spouse’s debt is their own problem to deal with . . . but the problem is that their debt will have an impact on you, even if it shows up in other areas of your financial life.
If your spouse has significant levels of debt, it will affect their ability to save for your future goals. It might affect how much you can afford to spend on a house. It will affect his or her ability to prepare for retirement.
Your spouse’s debt will affect your financial future – regardless of whether you decide to make payments on your spouse’s debt.
The good news is that you get to decide how your spouse’s debt will impact you. Will you come up with a plan to handle debt together as a family? Or, will you let your spouse take care of his or her debt on their own, and deal with the downstream consequences of the debt months or years down the road?
This doesn’t necessarily mean that one spouse literally needs to pay off the other’s debts – although it can! But you should come up with a joint plan that’s coordinated with your spouse on how to handle debt.
If you need help getting this conversation started with your spouse, I encourage you to schedule a free breakthrough session with me whenever you’re ready.
Am I Responsible for My Spouse’s Debt?
With all that being said – even if your spouse’s debt will impact you in some way, is the debt your legal responsibility?
Financial planners have a tendency to answer most questions they pose in blog articles with the phrase “it depends”, and I really, really try to avoid doing that here.
But in this case, there’s no getting around it: it depends.
Here are a few guidelines and questions to ask to help you determine whether you are responsible for your spouse’s debt.
This is not legal advice, as a) I’m not a lawyer, and b) every state has different laws. If you have a specific, acute question on this topic, I highly suggest reaching out to an attorney in your state.
What state are you in? Most states assume that married couples aren’t legally responsible for each other’s separate property, including debts.
But if you live in one of the nine community property states, the default assumption is that anything acquired in your marriage is owned equally by you and your spouse. (As of this writing, the community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington state, and Wisconsin).
If you’re in one of the states mentioned above, you’re more likely to be legally responsible for most forms of debt your spouse incurs.
Whose name is the debt in? If you’re listed as an account holder on the debt in any way, it’s your responsibility.
This can include being listed as one of the primary holders of the debt (for example, being a primary account holder on a credit card) or as a cosigner on a debt (for example, cosigning your spouse’s non-federal student loans).
If you file taxes jointly with your spouse and you owe the IRS, you each are responsible for the money. But if you file your taxes separately and your spouse owes back taxes, this is an example of something that wouldn’t be your legal responsibility.
One thing to note: in most cases where you and your spouse jointly “own” the debt, you shouldn’t assume that you each are legally responsible for 50% of the debt. You’re typically on the hook for the entire thing if your spouse doesn’t pay.
When was the debt acquired? Did the spouse have the debt before you got married, or was it acquired after?
Even in the community property states, debt that was acquired before marriage is typically treated as your spouse’s separate property that is solely their responsibility to handle.
But if you’re added to the debt after marriage, or if your spouse takes on more debt after you get married, it’s a different story.
Was the debt for essentials for your family? If you benefitted from your spouse acquiring debt in his or her name that was used for family essentials (like housing and food), it’s possible that your state law might dictate that this debt is your responsibility.
What Happens To Your Spouse’s Debt If They Pass Away?
Again, this is a case where you might not legally be responsible for a debt, but it likely will impact you.
Some forms of debt are automatically forgiven upon death. For example, federally-issued student loans are discharged upon the death of the borrower (once you provide the lender with documentation).
For most other forms of debt that are solely in your spouse’s name (credit cards, auto loans, medical bills, and so forth), you aren’t legally responsible for paying them… but your spouse’s estate is.
To use a straightforward example, if your spouse passes away with $100,000 in a separate bank account and $50,000 in medical debt, the issuer of the medical debt will be able to file a claim on your spouse’s estate to have the debt be paid from the money in the bank account.
In most states, there are a few other things that are usually paid from the $100,000 in the account first, including funeral expenses and other costs related to closing down the estate. But, the medical debt likely will be paid, or settled, using the money in the estate.
Is the $50,000 in this example technically your legal responsibility? No.
But it ultimately will impact the amount of money that’s left for you.
Again, none of the above should be interpreted as legal advice, and I encourage you to work with an attorney in your state to resolve any issues that arise in this area.
What Happens to Your Spouse’s Debt if You Get Divorced?
Simply put: the court that finalizes the divorce will decide who is responsible for the debt.
Many people often assume that keeping debts (or assets) with only one spouse’s name on them will automatically give them legal protection in the event of a divorce.
This is a myth.
It can be the case that a judge will divide your assets and debts based on whose name they are in, but it isn’t a guarantee.
Most states require that assets and liabilities be divided fairly between spouses in the event of a divorce, and this includes separate debts. (And again, community property states operate under a different set of guidelines that typically assume that all debts acquired during a marriage are shared property).
It is very possible that a divorce court could make a determination that your spouse’s debt is your responsibility to pay, depending on the facts and circumstances at hand.
Whether your debts are separate or joint may or may not give you legal protection in the event of a divorce; absent a prenup or postnup, the state will require you to split things up based on its specified legal framework.
My Advice to Couples Wondering If Their Spouse’s Debt Is Their Responsibility
If either you or your spouse has nontrivial amounts of debt, I highly encourage you both to work together to come up with a plan for how to handle the debt. There are a few different components to this:
What role do you want debt to play in your family going forward?
It can often be easier to have conversations about how to make decisions about debt in the future than it is to talk about debts that you’ve already incurred.
When considering your future goals, is debt a tool you and your spouse are going to use together to make financial progress, or is it something that you’re going to avoid at all costs?
Are you and your spouse willing to borrow money if you can find ways to achieve a rate of return with that money greater than the interest rate on the debt? Are there any limits to this?
Or are you never going to take out a loan ever again? Are there any limits to this? (For example, even couples who agree they will try never to borrow money again will often make an exception for mortgages.)
Are you going to use credit cards regularly as a family and pay them off every month, or are you going to cut up your credit cards and never use them again?
There aren’t necessarily right or wrong answers to these questions, but it’s important that you and your spouse come up with a game plan for how you are going to use debt as a family going forward.
Managing resentment and guilt
There are pros and cons for one spouse making payments on the other spouse’s debt.
Mathematically, there is very little reason to not work together to pay down your debt as a family. I typically find that couples make faster financial progress when they work together on all aspects of their family’s finances, and this includes debt.
Working together to pay down your debts keeps your financial attention focused on one thing at a time, which can help you make faster progress. And, it reduces the inefficiencies that can arise if you and your spouse are working on your goals separately.
But, of course, the implications of this decision go far beyond the spreadsheets. One spouse making payments on the other’s spouse can create feelings of resentment on the part of the spouse without the debt, or feelings of shame or guilt on the part of the spouse who incurred the debt.
Both of these dynamics can be damaging to your marriage in the long run.
If you’re feeling resentful toward your spouse for the debt they’ve incurred, or if you’re feeling guilty for burdening your spouse with your debt, I highly encourage you to schedule a free breakthrough session with me.
As of early 2024, I’ve helped couples pay off over $1.1 million in debt over the past seven years, and the vast majority of this debt was student loan debt held by only one member of the family. I have a number of success stories in helping couples navigate difficult conversations about debt, and I’d be happy to help you, too.
Don’t Let the Statistics Get You Down
It’s easy to look at the statistics around marriage, money, and divorce and be a pessimist. “If so many couples split up because of finances, and half of marriages end in divorce, why would I be responsible for my spouse’s debt?”
As I’ve discussed on my podcast in the past, though, these statistics don’t tell the full story.
In my experience, I see couples react in one of two ways when confronted with these statistics:
- They get worried about the alleged likelihood of getting divorced and decide to “protect” themselves financially from their spouse by not working with their spouse on financial issues like debt. By treating divorce as a likelihood or even an inevitability, they separate their finances and stop working together… which arguably makes the divorce even more likely. Or…
- They adopt the glass-half-full perspective: “If money fights often cause divorce, that means we can decrease our odds of splitting up by learning how to work together when it comes to our money.”
Money can strengthen your marriage if you and your spouse are committed to working on it together. If that’s what you want for your family, I’d be happy to help you – the first step is to book a free breakthrough session whenever you’re ready.