How completely marriage ties you and your spouse together depends a great deal on where you live, at least when it comes to debts. In the nine community property states – California, Louisiana, New Mexico, Washington, Arizona, Idaho, Nevada, Texas and Wisconsin – you're not only together for better or worse when you tie the knot, but you're one person in the eyes of creditors as well. What one of you owes, both of you owe, with a few exceptions. If you live in one of the other 41 states, the law usually doesn't obligate you to pay your spouse's debts.
Can a Spouse Be Liable for the Debt Incurred by the Other Spouse Prior to the Marriage?
Separate debts are treated much the same in both equitable distribution states and community property states. In community property states, separate debt is anything you took on before you got married. In the 41 equitable distribution states, it includes premarital debt, as well as any loans or accounts you take out in your name alone while you're married. A debt incurred before marriage is almost invariably the responsibility of the spouse who signed for it. Getting married doesn't turn it into a joint obligation or community debt, even in community property states.
Does a Surviving Spouse Have to Pay the Debts of a Dead Spouse?
If your spouse dies, the same community property rules apply to the debts he leaves behind. Because both partners jointly owe debts incurred by either of them, you're usually responsible for paying them. If you live in one of the other 41 states, your spouse's estate is usually responsible for paying his debts through the probate process. If he doesn't leave enough assets to cover all of them, the creditors typically don't get paid. Exceptions exist if you co-signed on an account. If your name is on it, you're still responsible for it, even if your spouse can no longer help you pay it. In some jurisdictions, you might be on the hook if the debt relates to your spouse's medical care. Otherwise, you can refer your spouse's creditors to the executor of his estate and you have the right to ask them not to call you again if they contact you looking for payment.
Does Marital Debt Include an Auto Loan in One Spouse's Name?
If your spouse finances a car while you're married, and if you live in a community property state, you also owe on the loan. It doesn’t matter if it's in his name alone. If you live in an equitable distribution state and the loan is in his name alone, you don't owe it and it’s not considered marital debt. It's his separate debt, and if you divorce, the courts in most equitable distribution states will assign it to your spouse for payment.
Can Both Spouses Be Garnished for the Same Debt?
When spouses are both liable for a debt, particularly because they co-signed on the account, they become "jointly and severally liable" for it. This is a legal way of saying that if the creditor gets a judgment for the money owed, it has the option of trying to collect from you, trying to collect from your spouse, or trying to collect from both of you. After a creditor has a judgment, it can use it to ask the court for permission to garnish your wages or your bank accounts. If the creditor chooses to, it can garnish both your wages, but only up to certain percentage limits set by state and federal law. If the limit is 25 percent, a creditor can take 25 percent from your pay, and 25 percent from your spouse's pay, double-dipping for 50 percent of your joint earnings until you pay the debt off. Both your bank accounts are vulnerable, as well any accounts you hold jointly.
- Nolo: Debt and Marriage – When Do I Owe My Spouse's Debts?
- Federal Trade Commission: Paying the Debts of a Deceased Relative – Who is Responsible?
- Bankrate.com: Is Wife Liable for Deceased Husband's Debt?
- Iowa Legal Aid: Rights and Responsibilities of Debtors (PDF)
- Gay, Jackson & McNally: Dividing Debt in Equitable Distribution Cases