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Tackling your debts

What happens if I marry someone with debt?

Posted 22 December 2016 by Christine Walsh

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Want to find out what happens if you marry someone with debts? Our blog will explain all.

Being engaged is an incredibly exciting time of life. Your head is probably full of wedding plans and hopes for the future. But what if the person you intend to marry has debt problems they still need to sort out?


If this is the case, you can definitely still build a secure financial future together, as long as you and your fiancé take the right approach to sorting the problem out.


Will I become responsible for their debts?


First of all, it’s important to clarify that you won’t suddenly become responsible for someone else’s debts, even if you marry them. If the debt was taken out in their name and their name only, you’ll never be contacted for payment by the lenders.


If you’ve taken out joint debt with the person you’re going to marry, you will both be equally responsible for paying all of the money back. That means that if your partner finds themselves unable to make their payments, the lender is within their rights to contact you for all of the outstanding debt.


Financial association


If you are financially linked, your partner’s debt can have implications for you – and this is the case whether you are married or not.


If you have taken out a joint financial product such as a loan, mortgage or bank account in the past and your partner has a low credit rating because of their debts, it is possible that this will affect you. You may find that you’re less likely to be accepted for credit or certain services, if you’re financially linked to someone with a poor credit history. Or you might find that you have to borrow at a more expensive rate of interest.


If this is the case, you can apply to the credit reference agencies and ask for a Notice of Disassociation. This will break the financial link between the two of you and should stop any negative impact on your credit history. You can apply for a Notice of Disassociation even if you’re married and live together.


Bear in mind, this will only work if the joint accounts that link you are now closed. If you’re still paying off a loan or have a joint account, you won’t be able to break the link until those accounts are inactive. The best thing you can do in this situation is look at ways to improve your partner’s credit score.


I’m worried about my partner’s debt


If you’re worried about your partner’s debt, the best thing you can do is encourage them to put a plan in place to deal with the problem.


Your partner may simply need to put a budget in place that allows them to afford everything they really need and their debt repayments at the same time. Sit down with your fiancé, and help them make a list of all the things they spend their money on and all the money they bring into the household.


They then need to subtract the outgoings figure from the income figure, and work out what’s leftover. This is the amount they have available to put towards their debts – your partner’s disposable income. If your partner has done this and found there isn’t enough to cover their repayments, they should try and cut back on non-essential spending and free up some more money within their budget.


A debt solution might be best


If there’s no way that your partner can afford their repayments, even with tweaks to their budget, a debt solution may be the right way forward. Debt solutions are plans that aim to put someone back in a position where they can afford their repayments every month. Some suspend payments on unsecured debts, others reduce them, and some reduce payments and provide debt write-off. Which one is suitable just depends on your partner’s situation.


You need to bear in mind that starting a debt solution will damage your partner’s credit history. This means you may find it harder to get credit in the future, like a joint loan or mortgage. Having said that, their credit history may already be damaged if they’ve missed payments. At least with a debt solution you’ll know the debts are being taken care of and aren’t growing out of control.


Debt solutions may require your partner to put something towards their unsecured debts each month, if they can afford it. A budget will be created and they’ll be expected to put their disposable income towards the debts. However, their financial responsibilities to the household will be taken into account as well. This means their payments will be worked out so they have enough money to contribute to any secured loans, mortgages and household bills you both pay together. So if your partner starts a debt solution, you won’t find yourself having to pay for everything else while your partner pays off their debts, and this is still the case if you marry them.


Will we be able to get a mortgage?


If you apply for a mortgage with your fiancé, and they have a poor credit history because of their debts, this can have an effect on whether the application is accepted or not.


But marrying someone with debt problems doesn’t mean you won’t ever be able to get a mortgage together – there are still options for you both to look at. There are mortgage providers that specialise in lending to people with poor credit histories however, you may have to pay a higher rate of interest and put down a larger deposit in order to agree a deal.


Talking it through


When you’re in a relationship, money can be a touchy subject. People sometimes find that they avoid talking about it because they’re afraid of upsetting the other person, or causing an argument. Similarly, your partner may find it difficult to talk about, because of feelings of embarrassment or anxiety.


It’s important to remember that anyone can find themselves with debt problems, it may help your other half if they knew about all the support that’s available to them. Our advisors here at Debt Advisory Centre are experts in talking to people about their debt worries and can identify the best way to become debt free. Just scroll to the bottom of the page for information on how to contact them.


We hope that this blog has made you feel better about the prospect of helping your fiancé with their debts. Once the debts are dealt with, you’ll both be free to focus on what really matters – building a happy, secure life together.

 

 

 

by Christine Walsh

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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.