Don’t get hitched until fiance fixes debt

Dear Debt Adviser,
I am getting ready to marry a man who has some tax problems, as he owes the IRS and he has accounts that are in collection for credit debt. I need to know what actions I need to take to have myself and my affairs not attached to his. In other words, what do I do before marrying him to protect myself from the IRS or creditors, and to keep his debt separate from mine? I don’t want to be held responsible for paying back debt that he had before I even knew him.
— Debra

Dear Debra,
My first suggestion for an action you can take to be certain that you remain separated from your fiance’s financial woes is not to marry him. My second suggestion is to at least postpone the wedding until he fully resolves his debt problems. But, love has a mind of its own, so just in case you don’t follow my unromantic advice, here are other options for you to consider.

Your fiance has two different financial problems. One, he owes the IRS, which is famous for its persistence in collecting what is owed them. Two, he owes what I am assuming is unsecured credit card debt. The IRS typically goes after a person’s bank account to collect when other more agreeable options, like setting up a payment plan, fail. So, do not under any circumstances open any joint bank account — checking or savings — with your fiance. Technically, your wages deposited in a joint account would not be eligible for levy, but it would be up to you to prove the money deposited was yours and not your husband’s. If you were successful in proving your case, you would then have to wait for the IRS to pay back the funds. You don’t want that.

Next, avoid any joint credit such as a mortgage loan, car loan or a co-signed loan. Any real property that is owned jointly would be eligible for a lien to satisfy your fiance’s debts.

Finally, please do not say ‘for richer or poorer’ until you and your fiance have at least worked out a plan to repay the IRS and his credit card debt. You need to know that in a specified period of time, he will have his financial problems cleared up. Also, I would recommend that you have a serious discussion about how he ended up with these debts, and more importantly, why he defaulted. You should ask what he is doing to make sure it won’t happen again and if he has learned from the experience. Just saying he won’t do it again or has learned a lesson shouldn’t be enough to set your mind at ease. Evidence of a budget, a savings plan and no new negatives on his credit report are what I suggest you look for.

One last thing. If you plan to live in a community-property state — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin and in some instances, Alaska and Puerto Rico — or end up in one as a result of a job move or other opportunity, be aware that any new debts incurred by him alone will be yours, too. Largely a holdover from Spanish Colonial law, community-property states treat debt incurred after a marriage as community property. This means that if there is a repeat of his bad luck, bad judgment or bad bill-paying habits, a creditor will look to you to bail him out.

Love is a great motivator and marriage even more so. However, the fact that you feel a need to have a financial barrier between you and your intended tells me you have some of the same concerns I do. So, while I am rooting for your success with whatever course of action you choose, remember the warning “Act in haste, repent at leisure!”

Good luck!

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