How to Tackle Debt as a Married Couple

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Marriage is about two people joining their lives together. Making the decision to spend the rest of your life with someone also means sharing financial decisions and taking care of debts together. Both parties may be entering the marriage with student loans, credit card debt, or personal loans. While in New Jersey you are not legally responsible for debt your spouse accrued before your marriage, you will become a financial team with your spouse. This means helping each other tackle debts both from before and after you say “I do.” Here are some tips on tackling marriage debt and subsequently reducing the financial stress in your relationship.

While ideally you should enter into a marriage with a full understanding of your spouse’s financial situation, it is never too late to sit down and have the money talk. Overcoming debt together requires open, honest communication about what you bring to the marital table financially. Don’t just talk about your debts, talk about your goals, too. What will paying off this debt allow you to do as a couple? Setting financial goals together will allow you to both motivate each other and hold each other accountable.

It’s important to keep in mind that you are in this together. After marriage, individual debt becomes “our debt.” Couples who have the most success tackling debt together tend to face their financial situation as teammates. Focus less on who brought more debt to the table and more on how each of you can contribute towards the goal of paying down the debt. Instead of only focusing on your debt individually, you will be able to stretch your money farther. Paying off debt when you’re working with two incomes will be easier than doing it alone.

Learning how to budget for two people (or more if you have children) will be very important to paying down your marriage debts. Don’t assume you and your spouse are on the same page about sticking to a specific budget. Sit down and determine how much money is coming in and out of the household on a weekly and monthly basis. You should both have a good understanding of your living expenses, debts, and financial goals. Be honest with your spouse about any financial difficulties you might be facing and see how you can fit this into your budget as a couple. After you know what your shared budget is, you will be able to come up with a realistic plan to pay off your debt.

Once you have a budget in place and a plan to pay off your debts, make sure you keep the conversation going. Check in with each other to make sure the budget you set is still in line with your financial realities and that you are making progress towards your goals. Like marriage, paying off debt is a long-term commitment that requires a lot of dedication and flexibility. Be patient with yourself and your partner as you take on the task of ridding yourselves of debt.

Make tackling debt together part of your goals as a couple. Financial difficulties are the leading cause of marital stress. If you have been struggling to pay down your debts and it is creating a strain within your marriage, it may be time to seek outside help. Veitengruber Law offers debt solution services to help you manage your debt and get back on track to financial health. Don’t hesitate to reach out to us for a free consultation.

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How will my Spouse’s Debt Affect me?

When you meet someone new, finding out their credit score is typically not your go-to first date conversation starter. In the whirlwind of new romance, money matters tend to remain ignored. It is often much later in the relationship—after a couple has already become financially entwined through marriage or the sharing household bills—that financial issues come to the surface. You may be surprised to find out your spouse has accrued a substantial debt that you had no idea about. When facing this startling new information, it may be difficult to know how to move forward with your partner. Here are some tips to dealing with a spouse who has debt.

1. Hold Off On Making Judgements

In situations like this, emotions can run high. You may feel lied to or betrayed by your partner for concealing their debt. Breathe through your initial reaction. When people feel attacked they tend to shut down or become defensive. Keeping an honest, open space for communication with your spouse will allow you to move forward to fix this problem together. This also goes for making judgements about their current financial choices. If you see your spouse making consistent efforts towards paying off a debt, don’t chide them for their purchase of a new pair of shoes. Paying off debt is a process that you cannot expect your spouse to complete overnight.

Keep in mind that debt accumulates for many reasons and a past debt does not necessarily mean your partner cannot be financially responsible now. Maybe they were overzealous with their first credit card or are struggling with student loan debt. Unemployment, divorce, and medical expenses can also add up quickly. Don’t judge too harshly until you have the full picture of your spouse’s debt.

2. Get the Details

The amount of debt your spouse has makes a difference, so it is important to know the exact number they are currently working to pay off. How your partner is paying off the debt matters, too.  Is the repayment situation short term (over a year or two) or long term (5-20 years)? If it is a long term repayment plan, you can expect this debt to impact your life together for years to come. This is also the time to check your spouse’s credit report with them. This will give you the full picture of any late payments, high balances, legal judgements, or bankruptcy filings they may have.

3. Know When You’re Liable

Many people assume that once you get married, you automatically take on your spouse’s past debt. This is not true. Your credit histories will remain separate for any debts or financial troubles that occurred before your marriage. New Jersey is a common law state, meaning that even after marriage you’re only responsible for debt accrued in your name.

This changes once you open joint accounts, apply for joint credit, cosign on loans, or include your spouse on an account as an authorized user. These actions will show up on your credit report and you will be responsible for the debt. If at any point your spouse cannot make payments, even if it is on debt they personally accrued (after the date of your marriage), you will be responsible for the full payment of the debt.

4. Decide How You’ll Make Purchases Going Forward

Your spouse’s debt, and its impact on their credit score, may make it difficult for you to make big purchases together for the duration of the repayment period. Depending on how much debt they have and how low their credit score is, you may be looking at taking on the full weight of big purchases for awhile. You may be hesitant to apply for joint credit, cosign, or add them as an authorized user on your accounts. Have an honest conversation about how you will make big purchases together going forward.

At Veitengruber Law, we know the stress of large debt can create a lasting impact on marriages and families. Our experienced legal team can help you sort through the debts and create a future path that looks bright. Our comprehensive approach to resolving debt problems can help relieve the stress on you and your spouse.