Marriage and Debt (MNP 3 Minute Debt Break)

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any Canadians enter marriage with a significant debt burden. As one of the most indebted countries globally, this isn't surprising. However, finances are often seen as a private matter. A recent survey revealed more than a third of couples either haven't or don't plan to discuss their debt with a potential spouse before marriage. Given that money and debt are leading causes of divorce, this lack of communication can be concerning.

Firstly, you will not automatically become responsible for your partner's pre-existing debt upon marriage. Debts taken out in your name remain yours, and your partner's debts remain theirs. However, financial decisions will need to be made together, starting with a household budget.

Your combined monthly debt payments will impact your ability to cover rent or mortgage, groceries, utilities, entertainment, and other shared costs. What was manageable individually may become challenging together, potentially leading to resentment if one person feels they are bearing more financial responsibility due to the other's debt.

The situation becomes more complex when both spouses' names are on a credit account, as both are equally liable. If one fails to make payments, the lender can pursue the other for the money. So, caution is needed when adding a spouse as a cardholder or authorized user on credit accounts. Their spending habits will directly affect your credit report. Irresponsible use or missed payments will negatively impact your credit rating.

While avoiding joint debts may seem wise, it's not always possible. Lenders often require both spouses to sign jointly or guarantee new debt, such as mortgages, car loans, and high-limit loans or lines of credit. Understanding how effectively you and your spouse can manage credit will be crucial throughout your marriage.

The most important conversation before marriage is about money and debt. It's not romantic, fun, or easy, but it sets the foundation for many future decisions, plans, and experiences together. Discuss your debt, repayment strategies, past financial troubles, money personality, spending and saving habits, budgeting approach, financial goals, and future debts you may acquire together or independently.

Finding a partner with personal and emotional compatibility may seem easier than establishing present and future financial compatibility. If you face unmanageable debt due to divorce or a relationship breakdown, a Licensed Insolvency Trustee can help. In a Free Confidential Consultation, they will review your financial situation to determine your options. They can advise on which debts you're responsible for and whether a Life-Changing Debt Solution is right for you, helping you achieve a financial fresh start.

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