However, because Pennsylvania is an equitable distribution state, if you have debts in your name exclusively, such as medical bills, credit cards, and so on, such debts will not be passed on to your spouse. People in Pennsylvania are solely responsible for debts made in their name. This rule is beneficial, because avoiding cosigning at all costs is the greatest way for spouses to avoid becoming responsible for each other’s obligations after death.
Spouses are equally accountable for all debts accumulated during the marriage in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), even if they didn’t agree to it. If you live in Pennsylvania, however, any debts that are solely in your name will not pass to your spouse when you die.
What is considered marital debt in Pennsylvania?
All debt acquired from the date of marriage to the date of final separation, including credit card debt, is discharged under section 3501(a) of the Pennsylvania Divorce Code “debt owed by a couple.” Credit card debt accrues from the date of marriage until the date of ultimate separation, regardless of who opened or used the card “debt owed by a couple.”
All of them “Section 3502(a) of the Divorce Code states that “marriage debt” is subject to equitable distribution by the court. This means that in a divorce case, the court has the right to divide marital credit card debt in whole or in part to either spouse. Several Pennsylvania court cases address how debt should be divided in a divorce, and some of those instances are described in this article “In a Pennsylvania divorce, how is debt handled?”
The Divorce Code does not create a distinct cause of action for credit card firms to seek repayment from a debtor’s spouse if the debtor’s spouse was not already liable for the credit card debt.
Credit Cards That Are In Your Name Only
In most common law states, you’re only responsible for credit card debt if it’s in your name. As a result, if the credit card is just in your spouse’s name, you are usually not responsible for the debt. Keep in mind, however, that if you have jointly owned assets, the credit card company can still pursue your spouse’s share of those assets.
Is a wife responsible for her husband’s credit card debt?
Unless you are a co-signor on the card or it is a joint account, you are normally not liable for your spouse’s credit card debt. State rules differ, and your duty for this debt may be affected by divorce or the death of your spouse.
Joint Credit Card Debt
The obligation for joint credit card debt varies by state, but in most cases, marital debt is defined as any debt incurred during the partnership, regardless of who is named on the account. In a divorce, regardless of who made the payment, both partners are likely to be accountable for the credit card debt.
How is marital debt divided?
Everything that spouses or domestic partners own collectively is referred to as community property. It covers anything you bought or received during your marriage or domestic relationship, including debt, that was not a gift or inheritance.
All profits generated by either spouse or partner (or both of you) during the marriage are considered community property, as is everything purchased with those earnings. By looking at the source of the funds used to purchase the land, you can typically tell if it belongs to the community. The property belongs to the community if the purchase money was acquired during the marriage.
For example, if you paid for a car with money you saved from your paycheck every month during your marriage/partnership, the car belongs to both you and your spouse or domestic partner. Because you earned the money during the marriage/partnership, the savings you have from your paycheck are community property.
All financial commitments (debts) accrued during your marriage or domestic partnership are considered community property. This is true even if just one of you was responsible for the debt, or if a credit card was solely in one spouse’s or partner’s name.
Each spouse or partner in California owns one-half of the community property. In addition, each spouse or partner is liable for half of the debt. The possessions and debts of the community are usually distributed equally.
It’s possible that you own more common property than you know. You might not realize that if your spouse or domestic partner has a pension plan, you have a right to a portion of the money in that plan if any of it was earned during your marriage or domestic relationship. You may possibly owe more money to the community than you know. You may not be aware that your spouse or partner has gone into debt in his or her own name. If the debt was accumulated while you were married or in a domestic partnership, it is also yours.
Quasi-community property is any sort of property acquired by one or both spouses or domestic partners while living in another state that would have been deemed community property if acquired while living in California.
In other words, if you or your spouse or partner lived outside of California during your marriage or partnership and earned money, purchased real estate, or acquired any other type of property that would be considered community property in California, that property is referred to as quasi-community property. It will also be considered as communal property in the event of a divorce or legal separation in California.
For example, suppose you and your spouse spent part of your marriage in New York, where you both worked and bought a car. You’ve relocated to California and are considering getting divorced or legally separated. The earnings from your separate occupations in New York, as well as the car, are quasi-community property since they would have been deemed community property if you had worked and purchased the car in California. As a result, wages and a car will be recognized as common property in a California divorce.
Separate Property
Anything you held before you got married or registered your domestic partnership is considered separate property. Even throughout the marriage or domestic partnership, inheritances and gifts to one spouse or domestic partner are separate property. Rents, earnings, and any other money you earn from your separate property are also yours. Separate property is also separate property if you buy it with separate property.
If you buy a car with money you inherited from a deceased relative, the car is yours even if you acquired it during your marriage or domestic partnership because it was purchased with your separate property.
Anything you acquire after the date of separation, including money you earn, is considered separate property. One of the reasons why the date of separation is so crucial is because of this. It can establish whether a piece of property or a debt belongs to the community or to the individual.
If you own separate property, it is solely yours as long as it is kept that way. Debts, like as credit cards obtained after the date of separation, might also be considered distinct property.
Always check the source of the funds utilized to purchase a product. You can then determine whether the object is separate or community property.
Mixed Community and Separate Property Commingling
Things might be part separate property and part shared property at times. This is referred to as “Because the separate property and common property have become mixed together, the term “commingling” has been coined. It can be difficult to figure out how to split property that is a combination of separate and community property.
One common scenario is when one party owned a home before to the marriage or domestic partnership and then sold it and used the funds to purchase another home after the marriage or domestic partnership was registered. This new house’s down payment would be deemed distinct property (since the money came from selling a house that 1 person owned before the marriage or partnership). The equity (worth) gained from paying down the house loan is communal property if the mortgage payments on the new house are made during the marriage or relationship using either one of your earnings. As a result, the house’s equity has become commingled.
Another scenario is when you or your spouse/partner has a pension or retirement benefit from a job held prior to or during the marriage. Before the marriage or registered domestic partnership, you each made individual contributions to your pension. Contributions made after the date of marriage or domestic partnership registration and before you separated are considered community property. Those donations become separate property after you separate. The exact division of the pension is tricky, and you may need the assistance of a pension specialist to sort it out. If you both have a pension, you may be entitled to preserve your separate pensions in some cases. However, you must be certain of the worth of each pension.
In general, a lawyer’s assistance is required when either spouse or partner has a pension. First and foremost, a pension can be one of your most significant possessions from your marriage or domestic partnership. Second, the regulations governing pensions are quite technical and do not apply to any other type of asset. A pension plan must be well-designed “Before a judge can make a decision on how the pension will be distributed, you must “join” as a party in your divorce case. A qualified domestic relations order, or QDRO, is the name of the court order. If you make a mistake, the consequences could be disastrous. It is worthwhile to hire a lawyer to create the QDRO for you.
If you have a question regarding whether an asset is community, separate, or mixed property, you should see a lawyer. The same is true if you’re not sure how to pay off a debt. For assistance in locating a lawyer, go here.
How can I not be responsible for my spouse’s debt?
Saying you’ve divided your finances isn’t enough; actions speak louder than words. A court may rule that you should share debts as well if you approach assets and accounts as if they’re shared. Separate bank accounts, automobile and other loans should be taken out in one person’s name exclusively, and property should be titled to one person or the other. This reduces your exposure to your spouse’s creditors, who can only seize assets that are wholly hers or her part of jointly owned property.
Does your spouse’s debt become yours?
No. Debts incurred before to the marriage remain the unique responsibility of the individual, even in common property jurisdictions. So, if your husband is still paying off school loans, for example, you shouldn’t be concerned that once you marry, you’ll be responsible for their debt.
If you took out a joint credit card before getting married, both partners are responsible for the debt. However, being married does not make you inherit debt; it is signing up for a joint account that makes you responsible for the debt.
How do I protect myself from my husband’s debt?
It’s critical to depart the marriage with no joint debt if you get divorced. Try to pay off joint credit cards at the same time or divide the debt and transfer it to separate credit cards in each partner’s name. Learn more about how a divorce affects debt division.
This will safeguard you if your ex-spouse declares bankruptcy or just fails to pay their debts. Creditors can pursue you for the whole amount of the debt if you aren’t protected.
Consider a debt management program if you find yourself in this scenario. A nonprofit group will act as a debt consolidator and will seek to lower your credit card interest rates.
Consumers simply have to make one monthly payment, which is cheaper than the sum of their previous payments. Credit counselors can also assist you in creating a budget and setting financial objectives to help you stay out of debt.
Such advise could also be useful even earlier, when starry-eyed couples are just getting started and haven’t even considered the consequences of credit card debt.
Financial security is the best wedding gift you can give your spouse and yourself. You don’t want to look back and realize you were actually walking the plank on that lovely day when you walked down the aisle.
Can you sue your spouse for not paying bills?
If your spouse fails to make payments on a loan that you co-signed, a creditor can still sue you. Even if a court judgment states your spouse is accountable for the debt, creditors can sue you.
Who is responsible for debt in a marriage?
The manner in which spouses share responsibility for debts incurred after marriage is determined in part by state regulations and in part by the sort of debt incurred after your wedding day.
Debt in Community Property States
If you live in one of the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) or Alaska, where newlyweds can (but rarely do) opt in to community property rules, debt incurred during your marriage is considered “community” debt, with each spouse sharing equal responsibility for repayment. Whether or not both spouses agreed to the debts, or even if they were both aware of them, they are both equally accountable for paying them off.
Debt in Common-Law States
If you live in one of the other states, or if you choose not to opt out of Alaska, your marital debt will be subject to common-law standards, which allow spouses to take on debt as individuals even after they marry. Common-law laws also allow spouses to keep separate bank accounts, borrow money on their own, apply for car loans and credit cards on their own, and assume other debts on their own.
For debts that benefit the couple and their family equally, such as food and clothing or rent on a shared residence, common-law standards assign joint spousal responsibility. They also distinguish between debts filed individually by one spouse or both spouses, and debts filed jointly by both spouses.
Individual debt, such as credit card accounts and loans, must be in one spouse’s name alone, which means that the credit application will only reflect that spouse’s credit score, income, employment history, and so on. In most cases, whatever spouse’s name is on the account is liable for paying it back. To put it another way, the spouse whose name isn’t on the debt isn’t responsible for it.
In a common-law state, joint debt can be incurred during marriage if both spouses apply for a loan or credit at the same time. In that instance, both couples’ credit ratings, as well as their incomes and assets, are taken into account in the financing decision. Under common-law standards, both spouses are equally accountable for repayment if their names appear on the loan (mortgage contract, credit cardholder agreement, vehicle loan note, etc.).
What defines marital property?
Property acquired after the parties have married is referred to as marital property. When a marriage is dissolved, property obtained before the marriage is deemed the acquiring spouse’s individual and separate property, and the court has no authority to allocate individual property.
After the marriage, however, if the property was inherited or given to one spouse as a gift from a third party, it is still regarded separate property.
The appreciated worth of property acquired before the marriage by one spouse but increased in value due to the efforts and/or work of the other or both spouses is considered marital property.
What is considered separate property in a marriage?
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are among the states that make up the United States. In these states, a married person’s property is divided into two categories: community property (owned jointly by both spouses) and separate property (owned solely by one spouse). All of the property gained by one or both spouses throughout the marriage is referred to as marital property. Separate property is any property obtained before or after the marriage by the spouses separately (or in some states after divorce). Any gifts or inheritances received by either spouse at any time are considered separate property. These general guidelines are subject to exceptions, which are clearly out in each state’s property laws.
