Is a Spouse Responsible for Credit Card Debt or Other Spousal Debts?
Getting married doesn't mean you immediately take on your spouse's debt. But what about debts they incur while you are married? Is a spouse responsible for credit card debt even if it's not in their name?
There isn't a one-size-fits-all answer, so you must understand how it works. Here's what you should know:
Is a Spouse Responsible for Credit Card Debt?
You promised to love your spouse through the good and the bad, but does that mean credit card debt, too?
It depends on where you live.
When Does a Spouse Become Responsible for Their Partner's Credit Card Debt?
When you wonder if you're responsible for your spouse's credit card debt, it depends on a few factors:
What state do you live in?
Is your name on the credit card?
Are the charges on the credit card for the greater good of the marriage or only for the good of the one spouse?
Liability of Credit Card Debt in Common Law States
Most states (41 of them) are ‘common law’ states. In these states, although exceptions do exist, debt in one spouse's name doesn't necessarily belong to the other.
For credit card debt, this means if your spouse's name is on a credit card and yours isn't, you are not liable for your spouse's debt. However, a spouse may be able to contest this in court, should you divorce, if they can prove the charges on the credit card benefitted both parties or the entire family.
Always consult with a qualified legal or financial professional to best understand your situation and options.
Community Debt Liabilities
If you live in one of the nine ‘community property’ states, your spouse's credit card debt is likely yours too. These nine states include:
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
In these states, assets and liabilities belonging to one spouse also belong to the other. This means if your spouse racks up credit card debt during your marriage, you'll be liable for it too, even if you didn't use the credit card.
Joint Credit Cards
However, no matter where you live, there is another way a spouse becomes responsible for credit card debt incurred: when you have a joint account.
For example, if your spouse applies for a Capital One credit card and puts you on the application as a co-signer, you are equally liable for your spouse's credit card debt. It doesn't matter who physically swiped the credit card; both parties are equally liable and responsible for the debt. When you co-sign, you agree to take responsibility for the debt if the primary applicant doesn’t pay that debt.
If your spouse applied for the credit card in your name without permission, you might have a way out, but you must prove you didn't authorize the application.
Credit Cards With Only One Spouse's Name
If you live in 1 of the 41 ‘common law’ states, and the credit card is only in your spouse's name, you likely will not be liable for the debt. However, there's a caveat — if you and your spouse have assets that you own together, the credit card company can still go after those joint assets to satisfy the debt owed. This is true even if you both own half of those assets and also are not on the credit card.
Do You Inherit Marriage Debt the Day You Say I Do?
The good news is that when you say your marriage vows, you aren't inheriting debt. Your spouse's debt before marriage is theirs, and you will not be liable. Note that if you applied for a credit card together before marriage, you are responsible for that debt. But any debt your spouse brings to the marriage in his or her name only belongs to him or her.
Even if your spouse doesn't pay the debt, you don't have to worry about your assets being at risk.
Approaching Debt and Finance Discussions Before the I Do's
I always encourage my clients to talk about finances before getting engaged or married. Once you're married, it's harder to change things if you're unhappy with how your spouse handles their finances.
Before shopping for rings, have the 'money talk.' Discuss debt, income, savings, and all things financial. If you aren't on the same page, consider seeking financial couples counseling before getting married. Money is one of the most common reasons for divorce, but you can avoid becoming a statistic if get your situation on track before getting married. (If you’re already married, then get talking ASAP!)
When you talk about money, discuss credit card debts, student loan debt, and any other debts or collections you have, and ask your future spouse to do the same. Together you can determine how you'll tackle the debt and who is responsible so that there aren't disagreements when you say 'I do' or otherwise.
Debt After a Spouse's Death
Dealing with debt after death can be tricky for a surviving spouse. Many assume they're automatically liable for their spouse's debt when they die.
You might not be.
Handling Your Spouse's Debts After They Die
Most spouses, unless you live in a community property state, aren't liable for their spouse's credit card debt unless it's on a joint account with their name.
Before getting lost in the amount of debt and how you'll handle it, here's what you must know:
Debt Paid With an Estate
Most debts incurred get paid from the person's estate. This takes the burden off you and ensures the debt is satisfied. State law where you live will determine how the estate is handled. In some states, there can be directions to pay the survivors first, especially if there's a child with special needs or other special circumstances.
If there's no estate to pay the debts, or the estate doesn't have enough money to cover the debts, then the debts will likely go unpaid. If this situation, your assets would likely be safe, but I was recommend consulting with a qualified attorney to help understand your specific situation.
Shared Spousal Debts
The exception to the rule is a joint credit card. If your name is on the card, you have joint (credit card) debt and must pay it, even in a state that is not a ‘community property’ state.
If you do live in one of the ‘community property’ states, you may also be liable for your spouse's debt, even if it was not a joint credit card. Again, contact an attorney to help you understand your particular circumstances and options.
Debt After Divorce
Getting divorced is stressful enough, and adding debts into the mix can make things even more complicated. If you live in a ‘community property’ states, you'll likely split the debt with your ex-spouse. However, if you live in a common law state, the person whose name is on the account is responsible for paying it. If you have joint debts, then you'll split those joint debts.
Note that there are exceptions to these rule. For example, a judge could rule that a spouse is responsible for the debt of a specific credit card even if it's not in their name if the judge is shown proof of that the funds were used to benefit the other spouse (i.e. the one whose name is not on the credit card).
Seek Help From Divorce and Bankruptcy Lawyers
Divorce can get tricky, so it's important to have the support of a credible divorce lawyer and potentially a bankruptcy lawyer. It's generally best to wait until you have the final divorce decree to file bankruptcy, but if you have joint debts, filing before the divorce is final may be benificial.
Handling Dreaded Calls From Debt Collectors
It's never fun to get phone calls from debt collectors, but it might happen, even if your name isn't on the debt. They might discuss the debt with you, but they must state that you are not responsible for repayment if your name isn't on the account.
Just because they can call you doesn't mean they can take advantage of you. It's okay to set boundaries, including the following:
Tell the collector how to contact you, such as by mail only
Set parameters for times or places the collector can call you, such as not at work
Request details of the debt in writing
If you're unsure how to proceed or feel like you're being taken advantage of, discuss your situation with a lawyer who can discuss your rights and help you choose your next steps.
Danger of Unpaid Shared Debts
If your spouse doesn't pay the shared debts, including debts where you're an authorized user, it can affect your credit.
Every time the debt hits another 30 days without payment, it hurts your credit scores. This is true even if the debt isn't yours but your name is on the account. Even if a judge makes your spouse solely responsible for the debt in the divorce decree, your name doesn't fall off the account unless you contact the credit card company and provide the divorce decree.
This means that your spouse's debt could continue to affect your credit score even after divorce if you aren't careful.
FAQs
How Do You Remove Unauthorized Users From Your Credit Account?
Each credit card company has a different procedure for removing authorized users from your credit card account. Typically, though, it requires a phone call to customer service, or you may be able to make the changes online in your dashboard.
Call and ask about the procedure for your card to ensure they remove the authorized user immediately.
Does the Debt of a Spouse Affect the Credit Score of Another?
Your spouse's debt might affect your credit score if you're an authorized user or if you co-signed on the account. However, if the account is only in your spouse's name, it usually will not affect your credit. See above for a more-detailed discussion.
How Will Divorce Impact Each Spouse's Credit Score?
Divorce can be hard on your credit score if your ex-spouse doesn't handle his debt responsibly. If your name is still on the account, your credit scores could drop if he doesn't pay his bills. However, your credit score won't be affected if you only have separate accounts and/or if he pays his debts on time.
The Bottom Line
Protect yourself financially while married and ensure any debts incurred in your name are with your approval and benefit you. Don't take on your spouse's debts, i.e. by putting them in your name, unless you're prepared to be financially responsible for them no matter what happens in your future.
Want to level up your game around money in your relationship? My free quiz will help you learn your Couple’s Money Personality Type AND how you can grow from there!
Adam Kol is The Couples Financial Coach. He helps couples go from financial overwhelm or fighting to clarity, teamwork, and peace of mind.
Adam is a Certified Financial Therapist-I™, Certified Mediator, and Tax Attorney with a Duke Law degree and a Master's in Tax Law from NYU. He is a husband, dad, and musician, as well.
Adam's wisdom has been shared with The Wall Street Journal, the Baltimore Ravens, CNBC, NewsNation, and more.
