When We Get Married, Does My Partners' Debt Become My Debt?

"For better or worse, richer or poorer."

Many Canadians enter marriage with a sizable debt burden from both parties. As the most heavily indebted country in the world by some measures, that doesn't come as much of a surprise.

But here's the trouble: People tend to view their finances as a private affair. So private, in fact, that a recent survey revealed more than a third of couples either haven't or don't plan to discuss their debt with a potential spouse before walking down the aisle.

Considering money and debt are among the leading causes of divorce, this refusal to communicate doesn't always engender optimism for a happily ever after.

Marrying Debt

The first and most important thing to know is you will not automatically become responsible for your partner's pre-existing debt when you get married. The debts you took out in your name will remain your debts. The debts your partner took out in their name will remain theirs. Though, with a potential caveat we will discuss below.

This doesn't necessarily mean things will always be easy. As a couple, you will need to make numerous financial decisions together – beginning with a household budget.

Each of your monthly debt payments will dictate how you will pay the rent or mortgage, how much to set aside for groceries, utilities, entertainment and whatever other costs you share together. What may have seemed manageable on your own may become untenable when blended together. And the seeds of bitterness can grow rapidly if one person perceives themselves to be carrying a greater share of the load because the other is bound by their debt.

Beware the Joint Debt

The situation becomes more complicated in cases where both spouses' names are on the credit account. You will each share equal liability for that debt. If one of you fails to make payments, the lender has a right to pursue the other for the money.

It is therefore important to exercise caution when adding a spouse as a cardholder or authorized user for your credit cards and accounts. Their spending habits will have a direct impact on your credit report. If they use the debt irresponsibly or fail to make the required payments, it will negatively affect your credit rating – even if you've never used the account yourself.

While it may seem easier to simply avoid acquiring joint debts, that may not always be possible. Some lenders will require both spouses to sign jointly for or guarantee new debt – including for mortgages, car loans, high limit loans or lines of credit. So, understanding how effectively you and your significant other can manage credit will be a significant consideration throughout your marriage.

Having the Conversation

The single most important conversation two people can have prior to tying the knot is the one about money and debt. It's not necessarily romantic – or fun or easy – but it will lay the groundwork for many future decisions, plans and experiences you'll share together. Hopefully for many years to come.

Talk about how much debt you have, your strategies for paying it back, any troubles you are experiencing or have experienced in the past. Talk about your money personality – your spending and saving habits and your approach to creating and sticking to a budget. Talk about your financial goals and the future debts you may one day seek to acquire, together and / or independently.

Finding a partner who you're personally and emotionally compatible with is the easy part. It's establishing present and future financial compatibility that will take some work.

Free Confidential Consultation

If you've found yourself in a situation of unmanageable debt because of a divorce or relationship breakdown, a Licensed Insolvency Trustee can help. During a Free Confidential Consultation, they will review your entire financial situation to determine your options. Your trustee can advise which debts you're responsible for and which ones you're not. They can also help you decide whether a Life-Changing Debt Solution is right for you – putting you on the path to the financial fresh start you need.