Many times when people get married, they are in great euphoria. They are often carried away by love and romance. No one in their right senses thinks of the impact of a spouse's debt on another after marriage. This is why we want to examine the question: Will I be liable for my spouse's debt?
Although we might not be able to give a direct Yes/No response, there are many instances where one can be held responsible for the spouse's debt.
Many U.S. states observe the same law when it comes to accessing if a spouse can be responsible for the debt of the other spouse. As long as the obligation is in both names, the spouse will be liable for the debt. This comes into play provided one is a joint account holder or a cosigner. A spouse will not be responsible for the obligation of the other person as long as both husband and wife are on the credit card, even as a cosigner. While there might not be any direct liability to any obligation, all assets jointly owned with the spouse could be subject to forfeiture to take care of the debt.
There are some states in the U.S. called property states (Nevada, Arizona, Texas, Washington, Idaho, California, Wisconsin, Alaska, and New Mexico). Different sets of rules bound these states. A spouse will be responsible for the debt in their name or co-signed in community property states or standard law states.
In community property states, however, any debt accrued by any of the parties during the marriage is jointly shared, not minding the name on the account. This is, however, for a debt that happens during the marriage. Any debt before or after the marriage is a significant responsibility of the party involved, except there is a joint agreement by the spouse. In some jurisdictions, however, if the debt is for the benefit of the marriage, it might be converted to a marital obligation and serviced by both parties. A house bought before marriage that will be used as a family house is a perfect example.
These rules also guide the distribution of debts after divorce, except both parties make a distinct agreement. The parties could agree that a debt that is one person's responsibility be transferred to another person, although this does not make the party contractually liable to the creditor. It also does not affect the credit score negatively. Not paying, however, will trigger a breach of contract claim by the other spouse. This could lead to contempt proceedings with the court that guided the dissolution.
If you are not sure if the debt incurred by the spouse is your obligation, we recommend speaking with an experienced attorney. Consider a family law attorney in your jurisdiction.
Marriage Settlement.
Before the conclusion of the marriage or during the marriage, the involved parties can execute a marriage settlement. This involves an agreement within the spouse that the properties will not be dissolved equally when the marriage ends, but each party retains its properties. Based on the marriage settlement, as well, it can also specify that the spouse has a spouse who has no right to some properties that belong to the other spouse. For instance, a farmhouse inherited from the parents.
The marriage settlement is executed in writing, which is dated and signed. Two non-qualified persons must also attest to it. Registration of the marriage settlement at the local register office enforces the document. It can be submitted at any local office.
Protection Of The Typical Home and Household Goods.
According to the Marriage Act, home and movable property must be available to the family when it belongs to only one of the spouses. As a result, the original owner of the property cannot do anything (like selling, for instance) without the consent of the other party.
These restrictions on the sale of the home or other real estate apply to any real estate that serves as a residential flat to the parties involved. This consent is also necessary when, for instance, a residential apartment is shared jointly between the spouse, and either party wants to sell their share to a third party!
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