Wondering Whether Your Fiance's Debt Will Soon Become Your Problem? When Is Bankruptcy An Option?

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If you're planning your wedding, you could--like many--be giving more thought to the big day than to the life that will follow it. If you've only ever discussed finances with your soon-to-be spouse in generalities, you may be shocked to learn that he or she is carrying tens or even hundreds of thousands of dollars in debt, whether from student loans, auto loans, credit cards, or medical judgments. Will you become responsible for these debts after you sign the marriage license? Should your soon-to-be spouse file for bankruptcy protection before your wedding instead? Read on to learn more about how personal debts are treated after marriage in the bankruptcy context. 

Will your spouse's debts become yours after marriage? 

Fortunately, even in community property states (where assets acquired after marriage are considered joint, even if one spouse earns far more than the other), debts accrued prior to a marriage are generally the responsibility only of the person who acquired them. This means your spouse's creditors can't come after you for repayment. The only exception to this comes in the context of using your income to determine the amount your spouse can afford to repay once a debt has been sent to small claims court and a judgment (and garnishment) has been entered.

This means that if your spouse elects to declare bankruptcy, he or she will want to do it on an individual, not a joint basis. This will usually require you to file your taxes under "married, filing separately" for a year or two while the bankruptcy matter is pending; this ensures that your income and tax liability are separated from your spouse's, making it far easier to prepare your taxes and limiting the impact your spouse's bankruptcy may have on your credit.  

How can your spouse proceed with bankruptcy after you get married? 

If your spouse is certain that he or she isn't able to fully repay the debts accrued prior to your marriage, bankruptcy is usually the best option. There's generally not much difference between declaring bankruptcy before or after you get married; your bankruptcy attorney will be able to take a look at your financial situation and provide you tailored advice. 

However, before your spouse pursues bankruptcy, you'll want to ensure that none of the debts he or she is planning to eliminate are jointly held; declaring bankruptcy on joint debts could negatively impact your own credit just as declaring bankruptcy yourself would. Speak to a bankruptcy lawyer for more information and guidance.