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March 04, 2022

Are you ultimately responsible for your partner's debts?

Many couples think marrying or setting up house together means merging their debt loads, but that's not necessarily the case. While many couples opt to pay down debt together, neither spouse is usually legally obligated to pay off debt that the other incurred before marriage.

If your spouse or partner never signed the original contract or requested a credit card, they can't be held responsible for the debt. In Canada, marriage alone does not make you responsible for your spouse's debts.

However, if you refinance a loan with your significant other and put your name on the loan's promissory note, or add yourself as a joint account holder of a credit card, you'll likely become responsible for those debts, even if your spouse took them on before you got together.

At the very least, this could mean setting some guidelines such as cutting up unnecessary credit cards and living on a debt-senstive budget.

If the spouse or common law partner does have a supplement credit card then consider the following, according to 4 Pillars Consulting Group, a bankruptcy consultancy:

  1. Does the credit card statement come in one name or both names?
  2. Does the spouse have a supplement credit card, if so, has it ever been used?
  3. Did both people sign up for the credit card as co-applicants?

Obviously, the more times you answer "Yes" the more likely you are to be responsible for the debt, they  warn.

Have you ever been stuck with someone's else's debt? How were things resolved?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...