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Old 01-19-2018, 01:29 PM
Urbanredneck Urbanredneck is offline
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Can you "marry" someones college loan debt?

Lets say you marry someone who had say $40,000 in college loans.

Is that considered YOUR debt now? Can they force you as a spouse to pay?
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Old 01-19-2018, 02:31 PM
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It depends.

https://studentloanhero.com/featured...ying-the-knot/

Quote:
3. Your spouse could be responsible for your loans
In certain situations, your spouse could be responsible for your student loan debt. While all federal loans and some private loans offer a death discharge if the borrower dies, some private loan lenders might not. So be sure to read the fine print.

If you go back to school and your spouse co-signs your loan, he or she will be legally responsible for your debt if you fail to make payments.

Even without co-signing, your spouse might be liable for your student loans. This is the case if you take out a student loan while you’re married and live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin).

Your spouse also might be responsible for your student loans if they are in default and you have no wages to garnish.
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Old 01-19-2018, 02:44 PM
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Another sign of modern times. Don't marry any one without doing a credit check first.
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Old 01-19-2018, 02:44 PM
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Does the above apply to spouses that acquired the debt before the marriage, and what if this debt isn't revealed until after the marriage?
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Old 01-19-2018, 03:09 PM
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The biggest concern with debt existing before marriage is that minimum monthly payments can be increased due to combined income.

If your spouse defaults on the loan, your tax refund can be affected. However, you can limit this by filling out an Injured Spouse Form (#8379).
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Old 01-19-2018, 03:55 PM
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Originally Posted by TriPolar View Post
Another sign of modern times. Don't marry any one without doing a credit check first.
Given how many marriages have been troubled by financial problems throughout history, I fail to see how this is a modern problem.
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Old 01-19-2018, 04:31 PM
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Given how many marriages have been troubled by financial problems throughout history, I fail to see how this is a modern problem.
Nowadays you can find a spendthrift spouse who absconds with your money thanks to the internet. Back in the good old days you wouldn't find them until they die of consumption in an opium den, 6 abandoned pregnant wives later.
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Old 01-19-2018, 04:37 PM
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[wrong thread!]
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Last edited by Frylock; 01-19-2018 at 04:37 PM.
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Old 01-19-2018, 04:38 PM
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Originally Posted by Derleth View Post
Given how many marriages have been troubled by financial problems throughout history, I fail to see how this is a modern problem.
It was rare for those financial problems to exist before marriage in the past. Most people married at a younger age then now, usually with no significant debt at all. Now people can be carrying huge student loans, credit card debt, car loans, even mortgages. It was back around 1990 first time I met someone who unknowingly married a bunch of debt, I guess that's the dark ages now. Certainly older people marrying or remarrying could be carrying a lot of debt way back when, but it was rare for the younger ones.
  #10  
Old 01-19-2018, 04:59 PM
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Originally Posted by Czarcasm View Post
Does the above apply to spouses that acquired the debt before the marriage, and what if this debt isn't revealed until after the marriage?
In a community property state, debt acquired before marriage still remains individual debt. But assets acquired during marriage are (mostly) community property. Creditors can attach community property to pay off individual debt. Community property includes the salaries of both spouses after marriage.

So let's say Mary, a corporate middle-manager, marries Stu, a full-time student with no assets or income, but $40,000 in student debt. Stu plans to tell his creditors "tough, I'm broke, you can't get blood from a turnip." His creditors' lawyers will tell Stu "You live in a community property state. Half of Mary's salary is yours. Pay up or we'll see the two of you in court."

Mary must also constantly exercise caution not to accidentally convert any of the separate assets she brings into the marriage into community assets. For example, say she has her paycheck direct deposited into her bank account. If she has her first check after marriage deposited into that same account, she has commingled separate and community assets. In some community property states, that would make the whole account community property and therefore fair game for Stu's creditors.

But if they got divorced, Stu's unpaid separate debt would remain his.

Stu's creditors' rights are not affected by Stu and Mary's lack of marital communications.

Last edited by Alley Dweller; 01-19-2018 at 05:01 PM.
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Old 01-19-2018, 05:03 PM
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IANAL (or an accountant), but it wouldn't surprise me much if a woman with student debt who marries a man and ends up being a joint owner on bank accounts, property, etc, could have that joint property seized to cover her debt if she were to not make the payments. When I married my wife, she had $0 in debt, so I've never really worried much about it.

ETA: ninja'd while typing

Last edited by HurricaneDitka; 01-19-2018 at 05:04 PM.
  #12  
Old 01-19-2018, 05:12 PM
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Whether you live in a community property state or not, unless you intended to live completely separate lives, your spouse's debt is going to cost you, regardless of whether you are legally liable for the debt.

Time to pay the rent? Make the car payments? Pay bills? "Sorry, honey, you know my paycheck has been attached by the court order. Love to help, but I'm broke."

Want to buy a house? Feel free to save for the down payment by yourself and get a mortgage in your own name because of his bad credit.

Want to get divorced? Your spouse doesn't have the cash to make child support payments.
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Old 01-19-2018, 07:44 PM
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Tangentially, my spouse and I both had student loan debt. When we married, we agreed that we each took responsibility for seeing them paid off. When my friend died, his parents paid off his student loans. These loans made it possible for me, my spouse, and many of my friends to go to university. I would want to do my part to keep this option available for future generations, such as my current students.
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Old 01-19-2018, 11:32 PM
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The other side of the adage:

You can marry more debt in an hour than you can accumulate in a lifetime.
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Old 01-20-2018, 08:05 AM
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Originally Posted by Alley Dweller View Post
Mary must also constantly exercise caution not to accidentally convert any of the separate assets she brings into the marriage into community assets. For example, say she has her paycheck direct deposited into her bank account. If she has her first check after marriage deposited into that same account, she has commingled separate and community assets. In some community property states, that would make the whole account community property and therefore fair game for Stu's creditors..
Is it feasible for the couple to avoid commingling their debts? What exactly would that typically involve? Could they just not get married but live their lives as if they were married? (though I hear in "common law" states, if certain criteria are met a couple is considered married even if they never requested one.)
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Old 01-20-2018, 08:39 AM
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Is it feasible for the couple to avoid commingling their debts? What exactly would that typically involve? Could they just not get married but live their lives as if they were married? (though I hear in "common law" states, if certain criteria are met a couple is considered married even if they never requested one.)
From what I can gather, there's only one state which both recognizes common-law marriages and community property in marriages: Texas. (Idaho also recognizes common-law marriages from before 1996.)

In most states that recognize common-law marriage, the couple has to "present themselves to the community" as though they were married. If the couple is crystal-clear in all respects that they are not married (i.e., they file individual tax returns, never call each other husband or wife, don't change their names, etc.), then they probably can avoid being viewed as "married" in the eyes of the state. However, there are probably state-by-state subtleties & caveats to this, so don't go taking this as legal advice.
  #17  
Old 01-20-2018, 01:06 PM
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Quote:
Originally Posted by SamuelA View Post
Is it feasible for the couple to avoid commingling their debts? What exactly would that typically involve? Could they just not get married but live their lives as if they were married? (though I hear in "common law" states, if certain criteria are met a couple is considered married even if they never requested one.)
In that context, I was not using the term "common law state" to mean a state that recognizes "common law marriages." I meant "common law property."

Common law property has nothing to do with common law marriage. It is the opposite of "community property." For example, Texas recognizes common law marriages, but it is a community property state, not a common law property state. When discussing community property, people usually call the states that do not have community property "common law states."

Sorry for the confusion.

Yes, you can avoid commingling debts and assets by not getting married. If you live in a state that recognizes common law marriage, you should avoid the acts (like telling everyone you are married) that would result in a common law marriage.
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Old 01-20-2018, 06:08 PM
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Originally Posted by TriPolar View Post
It was rare for those financial problems to exist before marriage in the past. Most people married at a younger age then now, usually with no significant debt at all. Now people can be carrying huge student loans, credit card debt, car loans, even mortgages. It was back around 1990 first time I met someone who unknowingly married a bunch of debt, I guess that's the dark ages now. Certainly older people marrying or remarrying could be carrying a lot of debt way back when, but it was rare for the younger ones.

50 years ago, Sexually Acquired Debt (SAD) was a woman marrying a man who carried debt. It was the same in the romance literature of the 1700's.

Acquiring debt from a woman that you marry seems to be a more recent problem. No doubt it existed in rare cases, but the usual problem was for the woman to acquire debt /after/ marriage that the man had to pay. Perhaps because up until 50 ~ 100 years ago, single women often couldn't get loans.
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Old 01-21-2018, 07:28 PM
Urbanredneck Urbanredneck is offline
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Originally Posted by Alley Dweller View Post
Whether you live in a community property state or not, unless you intended to live completely separate lives, your spouse's debt is going to cost you, regardless of whether you are legally liable for the debt.

Time to pay the rent? Make the car payments? Pay bills? "Sorry, honey, you know my paycheck has been attached by the court order. Love to help, but I'm broke."

Want to buy a house? Feel free to save for the down payment by yourself and get a mortgage in your own name because of his bad credit.
This is almost exactly what I heard on the Dave Ramsey show the other day.

A young man looking to get married. Well his future wife was pressuring him to take out a mortgage and buy a house BEFORE they got married but he wasnt sure why. He also said she was hesitant to totally tell him her finances and he was guessing she had some big outstanding student loans.

Ramsey basically told him that before proceeding with the marriage he has got to get her to sit down and come clean on all these issues because money is often the biggest issue which leads to divorce.
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Old 01-21-2018, 07:30 PM
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Another sign of modern times. Don't marry any one without doing a credit check first.
I did this with my wife.

She had some outstanding debt and I made her get those all paid off before I married her.
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Old 01-22-2018, 04:01 PM
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My husband and I have massive student loan debt, and one of my greatest financial fears is that we'll spend years paying off his loans and then something catastrophic will happen that will leave him dead and me stuck with all of my debt at a much lower income. I don't see any way around it, though, it just makes more sense to prioritize the higher interest rates on his much bigger loans using our combined income. So even though I'm not going to inherit his debt, I'm still at a disadvantage just by nature of him having it. (The disadvantage being the inability to pay my own loans down faster.)

Whatever, I'll take him anyway.
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Old 01-22-2018, 04:18 PM
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Originally Posted by Spice Weasel View Post
My husband and I have massive student loan debt, and one of my greatest financial fears is that we'll spend years paying off his loans and then something catastrophic will happen that will leave him dead and me stuck with all of my debt at a much lower income. I don't see any way around it, though, it just makes more sense to prioritize the higher interest rates on his much bigger loans using our combined income. So even though I'm not going to inherit his debt, I'm still at a disadvantage just by nature of him having it. (The disadvantage being the inability to pay my own loans down faster.)

Whatever, I'll take him anyway.
Life insurance. That's what it's for, to replace the lost income of the deceased. The trade off, of course, is that you have to pay for it and thus reduce your current assets. It's a tough situation. Best of luck to you.
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Old 01-23-2018, 08:51 PM
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... When my friend died, his parents paid off his student loans...
Presumably because they had co-signed? Otherwise, are they in any way legally bound to do anything of the sort?

I read something about debt collectors hounding the bereaved to convince them that they were legally and morally obligated to pay off the debt of the dearly departed - despite the law saying otherwise and such harassment being illegal.
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Old 01-25-2018, 06:55 PM
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Right. The student loan debt is owed by the son's estate. It has to be paid off before any heirs (like his parents) would get anything. But if the estate has negative value the heirs are not on the hook for that debt. The son beat the system by dying.

If his parents co-signed the loan, then, as you say, they'd be responsible for it.
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Old 01-26-2018, 10:29 AM
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Life insurance. That's what it's for, to replace the lost income of the deceased. The trade off, of course, is that you have to pay for it and thus reduce your current assets. It's a tough situation. Best of luck to you.
IANAAccountant, but IIRC the payout from life insurance is directly to the beneficiary, i.e. unless arranged otherwise is not part of the deceased's estate. This, if he died owing big bucks and no assets, the debt dies with him; but any life insurance payout goes to the person designated in the policy an the creditors fo the deceased have no claim on it... unless the spouse is obligated by state law to pay the other's debt.
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Old 01-26-2018, 11:14 AM
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Originally Posted by Spice Weasel View Post
My husband and I have massive student loan debt, and one of my greatest financial fears is that we'll spend years paying off his loans and then something catastrophic will happen that will leave him dead and me stuck with all of my debt at a much lower income. I don't see any way around it, though, it just makes more sense to prioritize the higher interest rates on his much bigger loans using our combined income. So even though I'm not going to inherit his debt, I'm still at a disadvantage just by nature of him having it. (The disadvantage being the inability to pay my own loans down faster.)
When my husband died his debt died with him - not that he had much. He always carefully structured his businesses so that any debt associated with them would pass away with him.

As I am not qualified to advise anyone on this I'd suggest consulting a professional about the matter.

Also, you have to be careful after your spouse passes away to do NOTHING to acknowledge any of his/her debt as your own. Creditors WILL call and mail letters trying to convince the grieving widow/er that he/she MUST pay up. If you make one payment, or agree to a payment plan, that debt really can become yours.

Really, paying for a half an hour with a lawyer with knowledge of estate law in my state after Mr. Broomstick's death was money and time well spent, as well as securing the services of an account for a couple other items.
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Old 01-26-2018, 11:19 AM
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I did this with my wife.

She had some outstanding debt and I made her get those all paid off before I married her.
That's so sweet. My previous wife came to the marriage with student loans. I paid them off shortly after the wedding.
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Old 01-26-2018, 11:40 AM
Spice Weasel Spice Weasel is offline
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Life insurance. That's what it's for, to replace the lost income of the deceased. The trade off, of course, is that you have to pay for it and thus reduce your current assets. It's a tough situation. Best of luck to you.
I think that's pretty much what we settled on. We're shopping for life insurance now. He's such a good guy, he was willing to prioritize my loans first. The interest rates are close but he has several smaller debts we can snowball whereas mine are one large loan. I'd rather go the snowball route and increase our cash flow over time.

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Originally Posted by Broomstick View Post
When my husband died his debt died with him - not that he had much. He always carefully structured his businesses so that any debt associated with them would pass away with him.

As I am not qualified to advise anyone on this I'd suggest consulting a professional about the matter.

Also, you have to be careful after your spouse passes away to do NOTHING to acknowledge any of his/her debt as your own. Creditors WILL call and mail letters trying to convince the grieving widow/er that he/she MUST pay up. If you make one payment, or agree to a payment plan, that debt really can become yours.

Really, paying for a half an hour with a lawyer with knowledge of estate law in my state after Mr. Broomstick's death was money and time well spent, as well as securing the services of an account for a couple other items.
Thanks, I will keep that in mind.
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Old 01-26-2018, 03:50 PM
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IANAAccountant, but IIRC the payout from life insurance is directly to the beneficiary, i.e. unless arranged otherwise is not part of the deceased's estate. This, if he died owing big bucks and no assets, the debt dies with him; but any life insurance payout goes to the person designated in the policy an the creditors fo the deceased have no claim on it... unless the spouse is obligated by state law to pay the other's debt.
I think you do not understand the issue.

Currently, The couple is spending all of their resources on paying off the husband's debt because it is the highest interest. She is afraid that if he dies prematurely, he will not be around to help pay off HER debt (after she spent all her money helping paying off HIS debt while he was alive).

Having the life insurance money go to the wife is exactly the point. When he is not around to help with paying off HER debt, the life insurance money can be used to pay off HER debt. I am not in any way suggesting that the life insurance money would be used to pay off HIS debt.
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Old 01-28-2018, 12:43 AM
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Originally Posted by Alley Dweller View Post
I think you do not understand the issue.

Currently, The couple is spending all of their resources on paying off the husband's debt because it is the highest interest. She is afraid that if he dies prematurely, he will not be around to help pay off HER debt (after she spent all her money helping paying off HIS debt while he was alive).

Having the life insurance money go to the wife is exactly the point. When he is not around to help with paying off HER debt, the life insurance money can be used to pay off HER debt. I am not in any way suggesting that the life insurance money would be used to pay off HIS debt.
OK, makes sense. Pay off the biggest loans fastest. Whether life insurance (term life) is a good idea is a careful decision depending on cost. Presumably hubby is young and healthy, a decent insurance, essentially against an unforeseen accident more than anything, should be pretty cheap.
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