Whose finances are whose?

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Dear Debt Adviser,
My husband has acquired another credit card! How can I ensure that I am not responsible for his debt? I am unemployable and survive on a disability check of $964 a month. My husband of two years earns more than $100,000 but keeps his income to himself. Any help is appreciated!
— Dawna

Dear Dawna,
Why do I feel like I’ve walked between two bears circling for a fight? Seriously, you do have several reasons for concern about your husband’s debt, and I’m glad you wrote. What you need to know is whether or not your husband’s credit cards are in his name only. From what you have written, it appears that it is quite likely they are. However, spouses do have access to each other’s Social Security numbers and other personal information, and it is unfortunately common for one spouse to acquire credit in the other spouse’s name without his or her permission.

Another concern may be where you live. Some states, mostly in the West or in those with a Spanish legal tradition, have what are called community property laws. Under these laws, any debts (with some exceptions) incurred after a marriage by either a husband or wife are owed by both, regardless of who accumulated them or whether the other had any knowledge or benefit from the debt. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska allows an opt-in for community property, as does Puerto Rico.

I detect more going on here than your husband’s debt. He could be opening another credit card account for many different reasons. A frank and open discussion between you and your husband regarding your financial lives in general sounds well past due. Two years of marriage means you two are still relative newlyweds. The sort of conversation I am recommending is better done before the marriage, but you can’t turn the clock back so have it as soon as you can.

During a nonstressful time, I would suggest that you broach the topic. Whatever comes from the discussion, try not to be judgmental and remain calm. Right now, it may seem that he is holding all the cards. I would feel uncomfortable in such a situation as well. Because you care for him and your marriage as well as your financial future, it’s important to have this discussion. Once everything is on the table, you can move forward together.

If the talk goes well, great. If not, I would suggest that both of you speak with a neutral third party to understand why not. Money is a powerful influence in our lives, and it is important to create a workable financial plan that includes both of your goals, wants and needs. The plan will also help you prepare for the unexpected life events that could cause financial strain.

In a worst case, let me give you a few facts that might help you feel a little less vulnerable. In general, disability payments cannot be garnished unless you owe child support, alimony or the government. So even if you live in a community property state where you are technically responsible for any debts created after your marriage, your sole source of income will be safe from your husband’s credit card issuers.

One thing I would suggest that you do, if you have not done so already, is make sure that you and your husband’s financial plan has provided for you in the event of his death with a life insurance policy or annuity that pays you directly and not the estate should he pass away before you. If you can’t work, barring a large estate, you will need income to live on. By naming you personally as a beneficiary, any creditors of his will not be able to take the proceeds. You may also want to contact an estate attorney or financial planner for advice. 

Good luck!

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