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You may have pledged to take your spouse for better or worse when you married, but does that mean you are responsible for their credit card debt?
If you have the urge to merge, you should also be on the same page as your partner about your finances. It’s hard enough to accomplish financial goals, without the additional obstacle of not cooperating with each other. And things can get more complicated when facing financial obstacles like credit card debt.
Combining finances is relatively common: 43 percent of American couples (those who are married or living with a partner) have taken this approach, while 23 percent keep their finances totally separate, according to Bankrate’s recent financial infidelity survey. Taking a middle path, 34 percent of partners keep both separate and combined accounts.
But the trend may be changing, since younger generations (millennials and Gen Zers) are more inclined to keep their finances totally separate than older couples. Those with lower household incomes are also less inclined to merge their finances.
However, whether you choose to keep separate accounts or combine them, there are cases in which you may still be held responsible for your partner’s debts.
Partners and credit card debt
Financial infidelity can encompass several types of money secrets, but hiding debt from a partner is a common one — which can also have long-term consequences. The same Bankrate survey also found that almost 12 percent of partnered people have a hidden credit card, and about 8 percent have had a secret credit card debt in the past.
This could be a red flag for married people who might end up taking the rap for their spouse’s credit card debt. Whether or not you can be held liable depends on which state you reside in and your contractual obligations.
Most U.S. states fall into the category of common law property states. In these 41 states, any assets acquired by one spouse belong solely to them.
On the other hand, in the nine states under so-called community law (which include Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico and Wisconsin), assets acquired in the course of a marriage belong to both spouses.
Debt liability in common law states
Common law property states regard property acquired by one spouse as belonging to them alone. However, if you are both named as owners, the property would belong to both of you.
If your spouse owns a credit card that is solely in their name, you are not liable for their debt. But creditors do have recourse to your spouse’s share in any assets that you own jointly with them.
And if you are a joint account holder on a credit card, both of you will be liable. You would also be liable if you co-signed the account for them. However, if you are merely an authorized user on your spouse’s credit card, you will not be held liable for their debt.
Debt liability in community law states
In so-called community property law states, assets acquired by any partner in the marriage are considered community property.
If debt is incurred in the course of the marriage, it could be considered a community debt for the benefit of the marriage for which you would be held liable too. However, if you are separated from your spouse and they then proceed to rack up debt, you wouldn’t necessarily be held responsible for such debt. Each situation is different, though, and if the state decides that this debt was incurred to benefit the marriage, you might still be held liable with your spouse.
In addition, you would be liable for credit card debts if you are a joint account holder or co-signer on the account.
Divorce or death of a spouse
If you go through a divorce, a court could assign debt to you that you were not originally liable for per the contractual terms of a credit card agreement. For instance, if you are not a joint account holder and not liable per the card agreement.
Even then, you would be responsible per the court’s assignment to pay off the debt assigned to you. If you don’t pay off this debt, while the card issuer cannot hold you responsible, your spouse could still sue you for disregarding the court order.
If your ex-spouse also files for bankruptcy, the bankruptcy court could discharge some of their debt. If it is a joint account, you would still be responsible for the outstanding debt.
When your spouse passes away, on the other hand, you are generally only liable for their credit card debt if you are a joint account holder or co-signer on the account. However, the executor of the estate could tap into property that you owned with your spouse to pay off any debt due, depending on your state law.
Debt collectors generally cannot contact you about a dead spouse’s debts unless you are a co-signer or joint account holder, or otherwise responsible for the debt. A dead spouse’s debt also should not impact your credit standing unless you were responsible for it.
The bottom line
You are generally not responsible for your spouse’s credit card debt unless you are a co-signer for the card or it is a joint account. However, state laws vary and divorce or the death of your spouse could also impact your liability for this debt.
Regardless of the circumstances, if you are concerned about your liability for a spouse’s credit card debt, it’s also a good idea to keep track of your credit reports to understand your own credit standing and any active joint accounts.
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