How to Legally Protect Yourself From Your Spouse's Debt

Marriage means sharing, but it doesn't have to mean sharing your spouse's debt burden. This isn't an issue with premarital debts, as you're not responsible for bills your spouse ran up while he was single. After marriage, it depends where you live. In community property states, your spouse's individual debts are usually yours as well. The nine community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. The remaining states are common law property states in which couples don't share individual debts. Your spouse's creditors may, however, have the right to take property that you own jointly with your spouse.

In many states, you and your spouse have at least some say in how your debts get divided. Work out a prenuptial or post-nuptial agreement with your spouse that keeps your income and debts separate. In community property states this doesn't protect you against any debts your spouse has already run up, but it will help shield you against debts he incurs after signing the agreement.

Actions speak louder than words, so saying that you've separated your finances isn't enough. If you treat assets and accounts as if they're shared, a court may decide you should share debts as well. Keep separate bank accounts, take out car and other loans in one name only and title property to one person or the other. Doing so limits your vulnerability to your spouse's creditors, who can only take items that belong solely to her or her share in jointly owned property.

In common law property states, if you don't cosign loans and your bank accounts are separate, her creditors have only limited ability to take your assets. If you have a prenup or postnup separating your finances, you still need to keep your assets and accounts separate if you want the court to uphold your agreement.

Consider filing bankruptcy, even if your spouse refuses. If you're already obligated for some of your spouse's bills, a bankruptcy discharge will wipe that obligation away. If your spouse doesn't file with you in a common law state, he'll still be on the hook, but you won't be. If you file bankruptcy in a community property state, both you and your spouse get released from the debt. Remember, however, that his creditors can still take jointly owned marital property acquired before the bankruptcy.

While it's smart to take precautions to protect yourself from your spouse's debt, understand that you may not be able to protect yourself completely. If you and your spouse file a joint tax return, for instance, you're both liable for any unpaid taxes. If the unpaid tax is your spouse's fault, you can apply to the IRS for innocent spouse relief to eliminate your debt. If you're denied, however, you have to pay.

Some states have their own quirks, as well. North Carolina, for instance, is a common-law state, but you're still liable for your spouse's medical bills if she fails to pay. Even in many common law states, debts for necessities like shelter or your children's tuition count as joint debts no matter whose name they are in.