What to Do When You Marry Someone With Debt

If your soon-to-be spouse is in debt, here's what you should consider before the wedding.

Getting married means combining many aspects of your financial life -- even if you decide to try to maintain separate accounts. So if your current or future spouse has a lot of debt, this is inevitably going to impact you too.

Debt can add stress to a relationship and make money fights much more likely, so it's important to address the issue upfront as early as possible. You and your beloved need to be on the same page, and you need a plan for how you'll tackle the debt. Here are a few tips to help you make that plan.

Discuss how the debt will affect your financial goals

When one partner is in debt, this can affect every aspect of your joint financial lives. For example, you may not be able to buy a house as soon as you planned because your partner's debt-to-income ratio will be too high thanks to loan payments. Or you may not have as much money to devote to other goals, such as saving for retirement or starting a family, because money needs to go towards servicing the debt.

It's important to have a real understanding of what a lot of debt could mean for you and to set goals together that are realistic in light of the financial situation you're in. You should also consider whether debt payoff will be a primary goal that you try to accomplish ASAP or whether you'll live with the debt for decades.

Decide how you'll handle repayment -- separately or together

If you'll be combining finances entirely, then debt payoff will obviously need to be a joint goal that you work on together. But if you'll maintain separate bank accounts, you'll need to decide if the money for debt payment will come solely out of your spouse's paychecks or if you'll both work on paying it down.

There are some obvious pros to joining forces and throwing as much money as you can at the debt, especially if it is high-interest debt such as credit card debt. After all, if two people are working on paying it back, you can make larger monthly payments and really accelerate your debt payoff timeline.

On the other hand, if you're hoping to maintain separate accounts so you can each have financial freedom to do what you want with much of your money, you may not want a lot of your spare cash going to your spouse's debt. If that's the case, make sure you're both OK with the idea that the debt is going to be the responsibility of the spouse who acquired it.

Anticipate how future life events, such as having children, could affect your payoff plan

While you may have grand plans for your spouse to pay off debt out of his or her account only, or you may believe you'll be able to become debt free in a few years, the reality is that life sometimes gets in the way.

You need to consider how big changes you're anticipating could affect your payoff plans -- and you also need to talk about unexpected surprises. For example, if you have separate accounts and your spouse is paying off his own debt, what would happen if he became unemployed or decided to become a stay-at-home dad? Would you chip in?

You need to be on the same page about how you'll plan for contingencies and adjust for life changes while making sure the debt gets paid.

Make and live by a budget that takes your partner's debts into account

Whether you'll have shared accounts or separate ones, you need to make sure you're able to afford your lifestyle while still working on getting the debt paid down. This can be especially important if you do plan to maintain separate bank accounts. After all, how is it going to work if one spouse can afford a vacation or to pay rent on a nicer apartment and the other can't because all of their money is going towards paying back loans?

Sit down and work out what you'll spend, what you'll save, and what you'll put towards the debt and make sure the budget is realistic and agreeable to you both. This will help you avoid a lot of fights and resentment during the debt payback process.

Consider whether you need to take steps to protect yourself financially

In some cases, it will be really important for you to make sure you don't get stuck sharing legal responsibility for your spouse's debt if you end up divorced or if your spouse passes away.

While no one likes to think about these things, you need to be practical and make sure you're protecting yourself when entering into a marriage -- especially if there's a big earning disparity between you and your spouse or if you have children from a prior relationship and you want to make sure they're financially protected.

In most cases, debt your spouse comes into the marriage with belongs only to your spouse alone and you won't become responsible for paying it after a divorce. But if you refinance the debt into both of your names or if your spouse gets more indebted and you live in a community property state, you could be on the hook for payback.

To protect yourself, understand your state's rules for when one person's debt becomes shared marital debt that you could be held legally liable for. And if necessary, consider talking with a lawyer about a prenuptial agreement. It's not romantic, but it could spare you a lot of financial heartache if something goes wrong.

Take these steps ASAP so debt doesn't hurt your relationship

Taking each of these steps is very important because you don't want the debt your spouse has to introduce resentment in your relationship or to cause money fights. When you make a plan together for how to handle the debt, you can make sure you're on the same page and that becoming debt free fits well into your joint financial goals.