Am I Responsible for My Spouse's Debt? No, Unless You Actually Co-Signed For It!
Am I Responsible for My Spouse's Debt? "Debt" Is a Contractual Obligation Between Parties To The Contract
Am I responsible for my spouse's debt? No, unless you actually co-signed for the debt. You are not automatically made party to the contracts of sale and credit your new spouse has agreed to be party to by virtue of your marriage. There is no mechanism in the law that automatically adds your name to any contract to which you have not agreed to be personally liable. While the civil act of marriage does, depending on the state that you live in, potentially entitle you to some portion of your new spouse's property either in the case of divorce or death, a marriage does not have any legal effect with regard to each participating spouse's personal debt accrued prior to the marriage. Michigan is not a community property state ... For the purposes of divorce, it is what is known as an "equitable distribution state." That is, couples who divorce are entitled to a distribution of the property that they accumulated through their marriage according to the contribution they made to that property. It is not an even 50% split by any means, though that can, in some circumstances, be the result. All of that discussion, however, concerns the question of property---not debt.
Am I Responsible For My Spouse's Debt? Chapter 7 and Chapter 13 Bankruptcy in Michigan
Likewise, if your spouse needs to file for Chapter 7 or Chapter 13 bankruptcy, your spouse's (or prospective spouse's) bankruptcy will not adversely affect your credit-report or credit score. Their bankruptcy will not discharge or positively affect your debt, either. However, if you are married to someone filing for bankruptcy, your income will be considered along with your spouse's with regard to your spouse's eligibility for Chapter 7 bankruptcy or with regard, potentially, to the size of your spouse's monthly payment in a Chapter 13 bankruptcy payment plan. Thus, if you are married to someone needing the relief of a Chapter 7 or Chapter 13 bankruptcy, it will be useful for you to participate as needed in your spouse's filing. If you assist your spouse in producing the necessary documentation requested by your spouse's bankruptcy lawyer, including documentation of your own income and your own debts and personal expenses, it can result in either an easier Chapter 7 bankruptcy for your spouse, or a cheaper Chapter 13 for your household as a whole. Your spouse's bankruptcy will not endanger or include your assets or otherwise involve you, but the Bankruptcy Code does examine a debtor's household circumstances as a whole, regardless of whether one member of the household is not part of the bankruptcy. You are not liable to your spouse's creditors for your spouse's debt, in other words, but your income can be taken into consideration with regard to the repayment of some of your spouse's debt in a Chapter 13 bankruptcy. The Michigan bankruptcy attorneys of The Hilla Law Firm, PLLC will work with your spouse---and you---to make sure that you both understand the role you will play in a bankruptcy filed by either of you.
Am I Responsbile for My Spouse's Debt? The Non-Financial Bottom-Line
Debt and financial issues are one of the leading causes of divorce in the US. It is always a good idea, therefore, to discuss your financial liabilities with a prospective spouse prior to marriage so that, as a couple, you can adequately plan for the lifestyle you wish to achieve together. Further, one may consider it a matter of personal ethics or morality to "warn" a prospective spouse if your debt-load is high. However, regardless of the outcome of that necessary discussion, unless you co-sign for loans or credit-cards after the marriage is completed, you will NOT "marry" each other's debt. If you are a Michigan resident and are considering filing for bankruptcy, please contact us at (866) 674-2317 or click the button below to schedule a free, initial consultation.