Should I Help Pay Off My Spouse’s Debt?
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When you marry someone with debt, merging your finances can be difficult. Juggling a budget with another person means getting aligned on financial priorities and determining which debts you’d prefer to focus on, if any.
But if you’re unsure whether you’d be comfortable paying off your spouse’s debt, you’ll need to take into consideration factors such as how the debt affects you and your spouse, and if it’s important for it to be repaid.
Here’s a look at when paying off your spouse’s debt may or may not make sense.
When to help pay off your spouse’s debt
A common financial goal is found
Forty-five percent of recently married American adults did not discuss debt with their partner before getting engaged, a February 2020 study from LendingTree on newlyweds’ finances found. However, talking money can help you determine whether it’d make sense for you to make payments on your spouse’s debt — and it could bring the two of you closer.
If you two share a financial goal like buying a home together, but their debt is affecting their ability to save money or stay afloat, then you may decide to tackle the debt together. For example, say you’ve earned a bonus at work, but don’t have a clear plan for the money. You may consider using it to help your spouse pay off a high-interest debt. Doing so would lighten their debt burden and save them money over interest. It could also free up cash for them to start focusing on another debt, contributing to a shared emergency fund or other something else.
Furthermore, if you’ve married someone with bad credit, paying off their debt could improve their credit by reducing their debt-to-income ratio. This could later help the two of you qualify for a shared loan, such as a mortgage.
The debt causes excessive stress
How each person in a couple deals with debt could also influence how you approach it. For example, if there’s a specific debt that is causing your spouse major stress, it may make sense for you to help them pay it off. Relieving that stress could have an intangible, but positive, effect in their day to day.
Community property state laws apply
If you live in a community property state, the government views all the debt accumulated while you’re married as a 50/50 split, no matter who’s responsible for it. Therefore, it would make sense to pay off your spouse’s debt, because it’s yours as well. If things go south for you two, you’d be responsible for your husband’s or your wife’s debts if you divorce.
Community property states include:
- New Mexico
In addition, the IRS also notes that Alaska is an opt-in community property state, while Tennessee and South Dakota have also passed elective laws regarding community property.
You cosigned a loan
If you’re the cosigner on a loan for your spouse, your credit score will be hurt if your partner misses a payment. That’s because when you cosign for a loan, you’re signing on to be equally responsible for the debt. If they miss payments, the debtor could come after you for payments.
The same situation applies if you and your spouse use a joint credit card.
When not to help pay off your spouse’s debt
Your spouse is considering filing for bankruptcy
If your spouse is filing for individual bankruptcy, it doesn’t make sense to pay any debt in advance. As long as you don’t have co-owned debt, the filing won’t hurt your credit score. And if your spouse is filing for bankruptcy to get rid of debts, there may be no benefit to paying them down beforehand.
You have an agreement to repay your own debts
Perhaps you and your spouse have discussed your debts and decided on a plan to address them individually. In this case, you should stick to that strategy.
“I know one couple that the wife came into the marriage with some student loan debt and added to the total to get her Ph.D.,” said Unverzagt. “She came into the marriage and continued in the marriage saying ‘this is my debt and I expect to pay it back.’ Her husband wanted to buy a fancy car and they agreed that was his debt to pay off. They have other debt that they jointly pay off.”
This couple had a solid deal in place that was comfortable and validated each other’s needs. If you can get there with your spouse, this can be a healthy way to deal with debts.
Financial independence is important
Maybe you really enjoy having separate bank accounts, or simply like the freedom that comes from having a set amount of money each month to spend or save as you please. If so, you can talk to your spouse about these preferences.
You should also discuss your financial habits to avoid having conflicts over differences in how you manage money. For example, if you enjoy a small splurge with each paycheck, such as getting a takeout meal or buying something for yourself, you should communicate that with your spouse. The less your spouse knows about your finances, the more room there is for misunderstandings and arguments.
If you’re forced to pay your husband’s or your wife’s debt, things could get messy. You shouldn’t feel forced to repay debts, or be banned from managing your own money. If this happens, understand that it could be a sign of financial abuse. You may reach out for help from the National Network to End Domestic Violence if you are the victim of financial abuse.
There are limited emergency funds
If you and your spouse haven’t built up an emergency fund — enough savings to cover three-to-six months of expenses — you might be hesitant to pay off your spouse’s debt. For example, you may each decide that one of you will focus on building savings while the other focuses on extraneous debt, such as from a credit card or personal loan.
The key, once again, is discussing a plan with your spouse and then sticking to it.
Marriage and debt: FAQ
Should I consider marrying someone with bad credit?
If you and your partner can come to an understanding about how to improve their credit score, you should not hold back. Good credit may help them (and in some cases, the two of you) access more competitive loans.
A bad credit score does not necessarily mean someone is irresponsible with money, either. They may have simply fallen on hard times, for example, or had a financial crisis. It’s important that you keep an open mind, as opposed to assuming your spouse doesn’t know how to manage money.
What happens to your credit when you get married?
Nothing happens to your credit when you get married. Your score and history remains yours, and theirs, theirs.
Am I responsible for any student loans my spouse incurred before marriage?
Any student loan debt accumulated by your spouse before you get married remains theirs. It is not your responsibility. The exception is if you live in a community property state, and your spouse accumulates that student loan debt during your marriage.
Am I responsible for my spouse’s debt if we divorce?
It depends on where you live. If you live in a community property state, all debts incurred during marriage are owed by both parties. If you live in a common-law state, all debts incurred by one spouse are typically that spouse’s responsibility.
Is a spouse responsible for medical bills after death?
In most cases, you will be responsible for your spouse’s medical debt following their death. Talk with a lawyer to get a better understanding of your situation. You may also contact the medical provider’s billing department to learn about your options for repayment.