Are You Liable for Your Spouse’s Debt?

The matter of debt responsibility is pretty cut and dried if you are single and there are no co-signers on your account or accounts. However, what about people who are married? If your spouse cannot pay their debt, are you liable? The answer depends on a number of different factors, including the state that you live in.

Most U.S. states are common law states, and in these places, you would typically not be responsible for your spouse’s personal debt as long as you are not a cosigner. However, creditors could seek to attach your spouse’s share of jointly owned property.

Debt tends to sneak up on you, and it can become a problem for many people. There are those who make irresponsible purchases, but overwhelming debt can accumulate for other reasons. For example, if your child needs a tonsillectomy, and you don’t have health insurance or a significant amount of money in the bank, what are you going to do?

Medical bills are one underlying cause of unmanageable debt, but there are others. A loss of income can necessitate excessive credit card usage, and people sometimes run up debts because they are trying to assist family members or friends.

We at OlsenDaines practice in Oregon and Washington. Oregon is a common-law state, but Washington is one of a handful of community property states.

When you marry someone, do you take on their debt?

In most cases, any debt your spouse had before you got married stays their own responsibility. This means if your partner had $10,000 in credit card debt before your wedding day, that debt doesn’t automatically become yours, too.

However, things can get more complicated after you tie the knot in “community property” states like Washington State.

What it looks like for community property states

In a community property state, generally speaking, you could be held responsible for debts that your spouse incurred while you were married. Debts that were owed before the marriage would not fall into the community debt category. If a personal credit card was used to benefit both parties, it would typically be looked upon as community debt. On the other hand, if the purchase only benefited the cardholder, his or her spouse may not be liable for the debt.

Can I be forced to pay my spouse’s debt?

Whether creditors can come after you for your spouse’s debt depends on several factors. Creditors can’t usually force you to pay unless you cosigned the loan or credit account. However, they might be able to go after property you own together (such as a house).

In Washington State’s community property system, creditors can often pursue either spouse for debts incurred during the marriage. This means a credit card company might be able to garnish your wages for your spouse’s shopping spree, even if you never used the card. In Oregon, you’re generally protected from your spouse’s individual debts.

Does debt get passed on to your spouse when they pass away?

Losing a spouse is hard enough without worrying about their debts. The good news is that in most cases, you don’t automatically inherit your spouse’s debts when they pass.

Instead, their debts typically become the responsibility of their estate. This is everything they owned at the time of death.

In community property states, you might be responsible for community debts from your marriage.

Can bankruptcy help?

When debt becomes too much to handle, bankruptcy might offer a fresh start. Chapter 7 bankruptcy can eliminate many types of unsecured debts, like credit cards and medical bills. Chapter 13 bankruptcy lets you create a payment plan to catch up on debts over three to five years.

Before making any decisions about bankruptcy, it’s crucial to talk with an experienced bankruptcy attorney who understands the laws in your state.

Let the Professionals Guide You Through Debt

If you would like to explore avenues that can lead to debt relief, our firm would be more than glad to assist you. We offer free case evaluations to people in Oregon and Washington.

You can set up an appointment right now when you give us a call.

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