Managing debt is tough enough on your own, but the situation can be a lot more complicated when you have a spouse in the picture. More specifically, many wonder if they’re responsible not only for their own personal debt, but that of their spouse, too.
Of particular concern is partnering up with someone who may have a huge debt pile. On top of your own debt that you have to manage, will you have to deal with your spouse’s debt too? More concerning, will your spouse’s debt automatically become yours after you tie the knot?
Key Points
- You’re not automatically responsible for your spouse’s pre-existing debt before marriage, which remains their own responsibility.
- However, joint debts are shared liabilities (ie. you opened the account together or co-signed).
- You should discuss debts, credit histories, and financial goals before marriage, build a joint budget, and use financial tools to stay organized.
- You can also choose to keep finances separate or use a hybrid system to balance transparency and autonomy.
Am I Responsible For My Spouse’s Debt In Canada?
The debt that each person brings to the marriage before nuptials are exchanged remains each individual’s responsibility. That means each spouse will not be responsible or liable for any pre-existing debt that the other has accumulated before the marriage took place.
The exception here is if you co-signed on any credit account, whether it was before you got married or after. Otherwise, any pre-existing debt remains each person’s responsibility and not both. So, if debt collectors ever come after your spouse for their unpaid debt, you will not be dragged into it if your name is not on the loan.
The same applies if you ever divorce: any debt that was brought into the marriage by your spouse will not be your responsibility but will remain with your ex-partner.
| Note: Shared assets after the marriage — like the family home — can become exposed to risk if your spouse takes out a loan in their own name but uses the shared asset as collateral. In this case, creditors may have a claim on that asset even if only one person signed the loan. In other words, if you own a house together and your spouse incurs a debt secured against it, that shared home may be subject to the debt recovery process. |
Am I Responsible For My Spouse’s Credit Card Debt?
No. As mentioned, any debt that is in your spouse’s name will not be your responsibility. However, if your name is on the account with theirs (ie. a joint credit card account), then you can be held liable for any unpaid debts on that credit card.
Before you sign up for a joint credit card account, be sure to discuss your finances and debts with your spouse.
Am I Responsible For My Spouse’s Student Debt?
After marriage, living with debt can get more complicated due to the presence of newer, larger expenses, like a house, children, and even the wedding itself. Your spouse may also be finishing their education and paying down a student loan.
Thankfully, you won’t be held responsible for their student loan debt, as long as they’re the sole account holder.
Am I Responsible For My Spouse’s Car Loan Debt?
If the car loan is solely in your spouse’s name, you won’t be responsible for the debt.
However, if you have a joint car loan, you’ll be just as responsible for the car loan debt as your spouse. That means if you co-signed for your spouse’s car loan, you and your spouse will be liable for any missed payments.
Are Married Couples Equally Responsible for Joint Debt?
A joint debt is when you sign a legal agreement to borrow some type of credit with your spouse, such as a loan. Depending on the circumstances, your lender might ask both spouses to apply jointly or for one spouse (typically the one with better credit) to act as a co-signer or guarantor.
Either way, both spouses become equally responsible for the debt, even if you weren’t married. This is simply because both names are legally tied to the loan, making each spouse liable for repayment. This shared responsibility ensures lenders can collect from either person, no matter who incurred the expense.
| The Bottom Line: If one of you stops making payments or following the terms of your agreement, both of you are held fully accountable for the remaining debt. |
Will I Be Responsible For My Spouse’s Debt After Marriage If They Die?
If your spouse passes away, their debts won’t just disappear. That said, you can only inherit that debt if the account was owned jointly. In Canada, a creditor cannot demand payment from you if the debt is solely in your spouse’s name.
However, your spouse’s debt will become part of their estate. Creditors get a claim on said estate, as well as the right to be repaid before any funds are given to the beneficiaries in your spouse’s will. So, even though you aren’t liable for your spouse’s debts, any unpaid balances will be withdrawn from the inheritance they leave behind.
How To Deal With Debt As A Couple
Debt can cause financial complications for a lot of married couples. Luckily, there are plenty of ways that you and your spouse can deal with debt together, including the following:
Communicate Clearly
Start by sitting down with your spouse to have the money talk. Although it can be a tedious and complex subject, discussing your savings and long-term money goals is an important step toward building financial compatibility, which is essential in any marriage.
Understanding each other’s finances prior to marriage is a good way to prevent any problems from occurring.
| Did you know? Around one in four couples in Canada say financial difficulties contributed to their divorce. In roughly 41% of separations, money troubles were the breaking point, adding to other challenges that had already strained the relationship. |
Build A Joint Budget
Track income and expenses together, which can be done quickly and easily using a budgeting app. When creating your budget, allocate debt payments fairly and consider income differences and shared responsibilities between you. Be sure to include personal spending allowances and maintain independence while working toward shared goals.
Learn more: Best Budgeting Apps In Canada
Define your priorities, whether it’s paying off high-interest debt, saving for a home, or building an emergency fund. Create both short- and long-term goals, and be sure to include timelines and milestones to stay motivated. Don’t forget to celebrate small wins, as acknowledging progress can keep morale high.
Check Each Other’s Credit Reports
To ensure the best financial compatibility possible, it’s a good idea to review each other’s credit profiles. This way, you’ll know exactly where each of you stands before you take on any joint debts.
| Pro Tip: You can check each other’s credit scores for free using Compare Hub. |
Should You Combine Your Accounts?
If you apply for a joint debt, co-sign a loan with your spouse, or authorize them to be a user on your credit account, all payment information will affect both of your credit profiles from that point on. For instance, if one spouse has a lower credit score than the other, it can lead to higher interest rates when applying together in the future.
Generally speaking, there are two ways you can handle your finances after marriage:
Combine Accounts
A joint account can be great for dividing everyday expenses and splitting the costs of larger loans, like mortgages. Plus, each spouse has complete access to funding if they have a financial emergency. That said, sharing accounts has its risks. Joint account holders are both responsible for any ownership liabilities and balances owing.
Keep Accounts Separate
If you and your spouse have different spending habits, it may be smarter to keep your finances separate. That way, you can manage your money independently and won’t be liable for any of their debts (or vice versa).
Although this requires a certain level of trust and communication, individual accounts can protect you during a separation or divorce.
| Which Option Is Best? Whether you should combine finances after marriage or keep them separate depends on your communication style, financial habits, and shared goals. Joint accounts can simplify budgeting and foster transparency. Separate accounts can maintain autonomy and reduce conflict. Many couples opt for a hybrid approach, with shared accounts for household expenses and individual accounts for personal spending. The key is finding a system that ensures fairness, trust, and financial harmony. |
Learn more: Should You Combine Finances After Marriage?
Important Things To Ask Your Partner Before Marriage
Before you exchange vows, it’s important to have a frank conversation about finances. Money is often the number one problem in marriages and can be the reason for marital breakdown. So, it’s important to take the time to have a discussion about money before you say ‘I do’.
Ask the following questions before tying the knot:
How Much Do They Owe?
Find out how much your partner owes before you get married. Also, have a discussion about how each person feels about debt and managing money.
If you are on two completely opposite ends of the spectrum, you will need to come up with a solution. Otherwise, money problems will be more likely to arise.
What Are Their Financial Goals?
Discuss your financial goals with your partner as well before you get married. Find out what aspirations your partner has, and be open about what your financial goals are as well. It’s important to be on the same page in this department.
Will They Agree To A Prenup?
You might also want to consider signing a prenuptial agreement. This contract may help protect you in the event of a divorce. This is especially true if you are going into a marriage with a lot of money and not much debt.
Of course, this can be a touchy subject, so be sure to approach it with great care.
Financial Tools For Couples To Deal With Debt
Consider one or more of the following tools and strategies for dealing with debt after marriage in Canada:
Mortgage Calculators
Mortgage calculators help couples estimate monthly payments and assess how shared debt affects home affordability. These tools are also useful for planning mortgage payments or comparing loan scenarios based on joint financial information.
Learn more: Mortgage Calculator
Debt Consolidation
Consolidating shared debts into one loan simplifies repayment and may reduce interest costs for both partners. It also creates a single monthly payment, making budgeting easier and reducing the risk of missed payments.
Credit Counsellors
A credit counsellor can help couples create a realistic debt management plan tailored to their combined income and obligations. They may also negotiate with creditors to lower interest rates or consolidate payments.
Final Thoughts
At the end of the day, the only debt that you are responsible for is the debt that you sign your name on. If the debt is under both of your names, or you co-signed on your spouse’s loan, you are liable. So, it’s wise to review both your financial obligations before combining finances. Otherwise, if you did not sign your name to anything, you are off the hook.
FAQs
Will my spouse’s debt affect my credit score?
Should you sign a marriage contract?
What happens if my spouse files for bankruptcy?
Should I open a joint credit card with my spouse?
How does buying a house as a common-law couple work?
