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Tackling your debts

If I get married will my debts follow me?

Posted 06 February 2016 by Shelley Bowers

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Worried about what happens to your debts when you get married. Worry no more, we have the answer.

So, the question is, if I get married will my debts follow me and affect my new husband or wife? We can put your mind at rest very quickly with this question – no, the debts you took in your name, will remain in your name, even after you’re married. In this blog we’ll look at why that’s the case. 

But first, if you’re worried that your debts are becoming unmanageable, why not speak to one of our trained debt advisors. We can go through your budget with you and work out the best solution for you. All you need to do is choose one of the ‘contact us’ options on the left of the page and take your first step on the path to getting your finances back under control. 

 

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Okay, now that’s out of the way, let’s get back to getting married when you have debts. Most people naturally think that once they get married, everything they have and own becomes jointly owned by their spouse, including any debt. Well, we can confidently tell you that this is not the case. We’ll explain why. 

Debt taken in your name, remains in your name 

When you apply for credit, if you do it in your own name, it stays in your name. And you remain the sole person responsible for it. This is true whether you take out credit in your sole name before or after you marry.

This would be true even if the unthinkable happened and you died. You could be safe in the knowledge that your debts will not get passed on to your spouse. Instead any debts you have will be paid out of your estate, which is any money or property you have in your name when you pass away, if you have any.

Debts taken in both names remain in both names 

The same is true of debts taken in both names, although this would be the same whether you were married or not. If you sign up to a debt in both names, if one of you cannot pay, the burden of paying will generally fall on the other person wholly. So, it’s always wise to make sure that you are happy with that idea, and you can afford to pay the whole payment by yourself, just in case the other person can’t for some reason, before you sign up to anything.

Your credit rating does not automatically become their credit rating 

It’s also useful to know that when you get married, your credit score, with the likes of Experian, Call Credit or Equifax, does not merge with your spouses. You each have your own credit file and it remains that way, even after you’re married. However, this would change slightly if you create a “financial association” between the two of you. One way you might do this is to open a joint bank account together.  If you do this then your two credit histories would become linked – which you might not want to happen if one of you have a poor credit history.

You’ll also create a financial association if you apply for credit in joint names. Not only will the lender check both of your credit histories when you apply, but if you are accepted then your credit histories will then be linked in this way. So if you apply for credit in both your names and one of you has a poor credit history, it will be taken into account by the lender. That’s because they’ll look at both your files and make a decision on whether to lend to you based on both your scores, plus a number of other criteria of their own. So, if your partner has a great credit history, you may find that yours makes any lending you’re offered more expensive or it might be more difficult than it would have been if you both had great credit scores.

If one of you has a good history of managing credit and one not so good then it makes sense to avoid creating a financial association by not taking products in your joint names – at least until you’ve had a chance to tackle the reasons for the poor credit history and improve it.

 

Why would you have a bad credit score? 

Every time you borrow money it is noted on your credit history.  And every time you make a repayment on time and in full that will appear on your credit file too – think of it as a “tick”.  The issues arise when you start to miss payments, or make late or partial payments – those will be noted on your credit history each month as a “cross”. Too many “crosses” can make it harder to be accepted for credit in future, or you may be able to find credit but at a higher interest rate.

It’s best to be honest 

Now, we’re not presuming to tell you what you should do, but it usually makes sense to tell your spouse about any problem debts you have before you get to the stage of being turned down because of your poor credit history. We know it can be very hard to own up to getting in trouble with money, especially to someone you love and want to spend the rest of your life with. What will they think? How will you tell them? The questions will, no doubt, be running through your mind. But, in our experience, it’s better to be honest about your financial situation. Trying to keep a secret like this can put a strain on your mental and even physical wellbeing.

Once you start to apply for things, like loans, mortgages, bank accounts, even utilities, in joint names, it’ll soon become clear that something is causing you to be rejected. If your partner knows they have a good credit history, with no defaults, late or part payments affecting their score, and you have defaults, it will be your score that’s the most likely cause of your problems. 

It’ll also be pretty hard and, no doubt, very stressful, trying to hide correspondence that you may be receiving from the lenders you’ve fallen behind with. You may get letters, emails and phone calls, all of which you’d have to monitor to make sure your partner didn’t find out.  

If you want some ideas on how to speak to your partner about your debts, we’ve written an article on the subject – Secret Debts. And, as we said at the start of this article, if you’d like to speak to someone about your problem debts, we are just a click away. Choose one of the ‘contact us’ links on the left of the page to get started – we promise you’ll feel so much better if you do.

 

by Shelley Bowers

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.