Marriage and Debt

In community property states, when you get married your new spouse’s debt doesn’t automatically become your debt but that doesn’t mean it won’t cost you. In Texas, creditors may be able to collect debt from assets that are community property. Community property consists of most assets that are acquired during the marriage. So you may not have to repay the debt but your community property may be liquidated to satisfy a judgment for your spouse’s debt, your joint bank account may be levied, and a lien may be attached to your nonexempt community property.

This problem doesn’t end after filing bankruptcy. When a person files bankruptcy individually their spouse’s future income is considered when determining the debtor’s disposable income. Disposable income is considered to determine eligibility to file Chapter 7 bankruptcy cases and it is used in calculating how much money is available to pay creditors in a Chapter 13 bankruptcy case.

Now don’t misunderstand the point of this article. I am not suggesting that you pick your future spouse based on the amount of debt they have accumulated before marriage. However, don’t go into a marriage with your eyes shut as to the consequences and the challenges associated with marrying your future husband or wife. Addressing these issues before marriage may make the problem easier to solve. The debtor may be able to file bankruptcy and discharge the debt before getting married. They may also be able to settle the debt owed to the creditor while they have a single income for much less than after marriage. Love, attraction, and all the other emotions we feel when we choose to get married are wonderful things, but don’t ignore the financial costs of getting married.