It is not difficult for couples to mingle their debt, but it is almost impossible to separate joint debt. Getting married does not necessarily require the combination of credit history and debts. As a practical consideration, many couples keep their financial obligations separate from the start of the relationship. All of them should talk about their debts early in the relationship. After all, should the marriage fall apart, creditors will not recognize a divorce court's directive of debt responsibility. While some couples reach a simple agreement on debt management, another option is to create a formal prenuptial agreement.
Talk about debt separation prior to marriage, or make that talk a priority early in the marriage. Make allocations to decide which debts will be paid by each party, and if any of the debt will be a shared obligation. Couples that blend finances but keep debt separate must agree to pay their debts out of a personal expense allowance. Any shared debt becomes part of the total household budget.
Engage a lawyer if you want to create a prenuptial agreement. Each partner should have a separate lawyer to create a legally binding document. Separate premarital financial obligations and debts in the prenuptial agreement.
Create a monthly budget for each of you. Use an overview of income and expenses to identify the amount you each can afford to pay on the individual debt. Prepare a separate household budget for shared expenses such as utilities, rent or mortgage.
Maintain separate checking accounts just for the purpose of paying individual debts. A joint checking account can be opened for mutual financial responsibilities and to pay items in the shared household budget.
- A couple can create a legal document at a later date that voids the prenuptial debt agreement. The original agreement could include a clause that voids the original agreement once all premarital debts are paid.
- Avoid opening joint credit card accounts. If things go really badly, creditors will be unable to garnish your checking or savings account if your partner falls behind on the payments.