If your spouse (or spouse-to-be) is struggling with credit card debt, you might be wondering if you’re responsible for repayment. The answer depends on a few things, including where you live and whether you are a cosigner or have a joint account.
In a Fidelity study conducted between 2007 and 2018, more than half of married couples reported bringing debt into their relationships, and four in 10 respondents said it had a negative impact on the marriage. Your partner’s debt — depending on the circumstances — could also potentially impact your credit score, making you question whether it’s a good idea to have joint credit card accounts with your partner.
Here’s what you need to know about managing debt as a couple.
What Happens if Your Spouse Has Credit Card Debt?
Generally speaking, one person cannot be held liable to pay another adult’s credit card debt — but this isn’t true in every state.
There are nine states known as community property law states. These automatically assign ownership of debt to both spouses in a marriage, whether for new assets (like a house or a car) or new debt (like credit card balances and mortgages).
“New debts that are incurred during the marriage are often considered the responsibility of both in community property states,” says Nathan Grant, an analyst at Credit Card Insider, a personal finance website.
Here are the nine community property states:
- New Mexico
If you live in one of those states, you and your spouse will be jointly liable for most debts incurred during the marriage. Outside of these nine states, any assets or debts acquired only belong to that one spouse.
Also, the sum total of all shared debts and assets may be considered fair game in the event of a divorce. A judge might divide the debt equally or proportionally, depending on what you and/or your legal counsel negotiate on your behalf.
If you’re worried about being liable for your spouse’s debt, consider a prenuptial agreement.
Outside of those circumstances, there’s still one more situation in which you would be responsible for your spouse’s debt: If you signed on as a joint account holder on a credit card, it’s your responsibility to pay the debt on that card, even if you weren’t the one making the purchases. “If my husband signs up for a credit card and I sign also for the same credit card acknowledging responsibility … I’m responsible for all the debt he racks up,” says Gina McKague, financial planner and founder McKague Financial, a Michigan-based retirement planning firm.
Authorized users are not held liable for repaying debt incurred on the main account holder’s card, though that debt may impact the authorized user’s credit score (more on that below).
Do You Inherit Debt When You Get Married?
No. Even in community property states, debts incurred before the marriage remain the sole responsibility of the individual. So if your spouse is still paying off student loans, for instance, you shouldn’t worry that you’ll become liable for their debt after you get married.
If you signed up for a joint credit card before getting married, then both spouses would be responsible for that debt. But the act of getting married doesn’t cause you to inherit debt — signing up for a joint account is what makes the debt your responsibility.
Does Your Spouse’s Debt Impact Your Credit Score?
There are two situations in which your spouse’s debt would impact your credit score. The first is if you signed up for a joint account. In this case, you knowingly signed on to take responsibility for any debt incurred from purchases made with the card. If you and your spouse pay your bills on time and keep your balances low, that credit card will positively impact both of your credit scores. On the other hand, if either of you miss payments or run up a balance, both of your credit scores will take a hit.
Your spouse’s debt can also impact your credit score if you were added as an authorized user to an account. This situation is more of a concern for couples because one spouse might not realize they were added as an authorized user, says McKague, something she’s seen happen during a separation.
“If I’m a user on the account, it also negatively impacts me with my credit score, even if I’m not actively using that card and even if I don’t even know he put my name on,” she says.
Most companies require a Social Security number when adding an authorized user, but many don’t. As a best practice, you’ll want to keep an eye on your credit report any time you’re an authorized user on anyone’s credit card — including your spouse.
What If Your Spouse Passes Away?
As a general rule, no one is obligated to pay the debt of a person who has died, but there are a couple of exceptions.
In community property states, you’d be responsible for any debts incurred during the marriage in the event your spouse dies. And in any state, if you opened a joint account with your spouse, you’d be responsible for that debt after their death. Across the board, authorized users are not responsible for a deceased cardholder’s debt.
This is a good reason to keep credit card accounts separate when you’re married, says McKague: “Legally speaking, there is no obligation. In most cases, I would tell spouses in a non-community property state, for all intents and purposes, to just hold separate accounts.”
Finally, you should hammer out some specific details in you and your spouse’s wills. Depending on the size of your partner’s individual assets — such as retirement savings, properties and cash savings — a lot could be at stake if your spouse also had considerable debt before passing away.
When someone dies, courts typically order the settlement of any outstanding debts through a process called probate. Therefore, while you might not be on the hook directly for your spouse’s credit card debt, that debt might have to be settled before you can access any money left to you by your loved one.
In community property states, courts have the power to use life insurance money to settle outstanding debts, even if you are the legal beneficiary. This isn’t true for non-community property states, so that money is typically yours to use as you wish.