- What a Woman Should Do When Her Partner Has Debt
- Is it wise to repay your partner’s debt?
- You don’t land into debt
- Your credit score is not affected
- Support your partner instead of making him feel guilty
- Keep your finances separate to some extent
- Plan a budget and change your lifestyle too
- Here are a few debt relief options to choose from:
- What do I do if my partner is in debt?
- What to do if your partner has debt
- 1. Provide help if you’re in the position to do so
- 2. Consider a debt consolidation loan
- 3. Consider a balance transfer credit card
- 4. Consider refinancing
- Dating In Debt: Why More People Are Saying No To Toxic Financial Baggage
- Emotions, Logistics, and Getting Everything We Want
- How Someone Else’s Money Matters For Your Goals
- Not All Debt Is Created Equal
- The Stress Is Real
What a Woman Should Do When Her Partner Has Debt
This post may contain affiliate links. Click here to read my full disclosure.
The following is a guest blog post from Good Nelly, financial writer.
What to do when your partner has debt… Obviously, it is not a pleasant situation.
But, at the same time, it is not wise to leave your partner just because he has debt problems.
So, first of all, stop worrying and then check out what to do if your partner has debt problems.
Is it wise to repay your partner’s debt?
When you come to know after marriage that your husband has significant debt, you may ask yourself, should you pay off your husband’s debt? Well, you can repay the debt or help him to do so. However, before paying off his debt, make sure you check out the following things.
Make sure you know everything about your partner’s debt and be assured that he hasn’t hidden anything from you. If required, ask him questions about the total amount payable, the reasons for falling into debt, his plans to repay it, and so on.
You don’t land into debt
Most importantly, you shouldn’t face similar debt situation while helping your spouse to overcome his debt problems. Neither you should shell out your savings, especially emergency savings to repay his debt, nor you should take out a loan to help your partner.
Your credit score is not affected
If you cosign on a loan, you become responsible to repay the debt if your partner defaults on the loan; that is, he isn’t able to make the payments. Moreover, if your credit score is good, in the future, you can take out a loan, in your name, with suitable terms and conditions.
It may sound harsh but in case your relationship doesn’t work out or you’re not legally bound, you may have to experience serious financial consequences if you go that extra mile to help your partner overcome his debt crisis.
So, if your intuition says you not to take the burden of your partner’s debt, don’t do it. But, you can very well support and help him to solve his debt problems.
Here is what to do when your partner has debt.
Support your partner instead of making him feel guilty
Your partner is already feeling guilty; so, it’s better you assure him and support him to find a way out. Avoid resentment at any cost.
What has happened has happened. Now, you should discuss how to solve the debt problem and manage your finances in a way such that it never happens again.
Helping each other and dealing with the crisis together can help you overcome it successfully.
Keep your finances separate to some extent
It is practical to do so. This way, if required, you can take out a loan with suitable terms and conditions.
As discussed, do not take out a loan in your name; it can make the matter worse. Instead, save as much as you can, put the required amount towards your emergency account, and use the rest to repay your partner’s debt.
It is advisable to deposit the required amount in the emergency account and meet your daily necessities, and then use the surplus to repay debt.
Plan a budget and change your lifestyle too
Planning a proper budget is the initial step in every financial planning. While planning one, make sure you’re creating a realistic budget, which both of you will be able to follow.
For the time being, change your lifestyle a bit. For example, restrict eating outs and plan homemade meals, do not plan an elaborate vacation, stop visiting the shopping malls, prepare a list when going grocery shopping, and so on.
If you change your lifestyle a bit, you can be a great motivator, and your spouse will also feel motivated to follow it and repay debt as soon as possible.
Choose a suitable debt relief strategy
Now that you’ve planned a realistic budget, it’s time to select a suitable debt relief strategy that would help to solve the debt problem.
Note from Melissa: Most of the time, folks that are buried in debt are facing the financial problems due to behavioral issues. If you do decide to use a debt consolidation strategy, please close the accounts you’ve paid off immediately. The last thing you want to do is find yourself doubling your liabilities by charging up the same cards again!
Here are a few debt relief options to choose from:
- Book a credit counseling session
You take the initial step and book a credit counseling session with a reputed organization. Take your partner and discuss your debt problems. The counselor will offer tips and suggestions to solve the debt problem.
If you can’t overcome the debt problem even after following the suggestions, the organization can offer a DMP (Debt Management Plan) enrolling in which you can repay debt with complete professional guidance.
- Settle the debts to repay fast
If you think that both of you can’t repay the debts in full, then you can opt for debt settlement. Through this option, your partner can pay less than what he owes. However, he would have to pay tax on the forbidden debt amount.
Both of you can negotiate with the creditors or take professional help if required.
If your fiance has credit card debt, you can transfer the balance to a low-interest rate card. It can be a powerful tool to repay debt when you’ve tried every other option to save more and more.
By opting for this consolidation method, you can repay multiple credit card debts with just a single payment every month at a much lower rate.
You can take out a low-interest rate balance transfer card for the purpose. However, make sure to repay the entire balance within the low introductory rate period to avoid much higher rate after the period is over.
After you’re successful in solving the debt problem, make sure you plan your finances such that you never have to face this situation again. Plan one or two monthly financial meetings when you’ll only discuss your financial life and plan your moves for a better financial future.
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What do I do if my partner is in debt?
Differences in how finances are managed can cause friction in otherwise happy couples. One partner might be frugal, while the other spends money freely, and has the debt to show for it. But when you marry, does that mean you assume your spouse’s debt, or do financial obligations incurred prior to marriage remain separate?
With personal debt in the U.S. nearly $26,500 in 2020, and credit card debt topping out at $820 billion, it pays to know your partner has debt before tying the knot. After all, your financial lives are about to become one.
Before making any big decisions, you may want to reach out for financial advice. Online marketplace Credible is a great place to start. You can use Credible to browse lown options, compare rates and determine what makes sense for your unique situation.
What to do if your partner has debt
Money matters, so talking about finances with your partner is a must. It's important to come up with a financial plan together and find realistic ways to tackle it.
While personal loans and credit card debt don’t particularly lend themselves to traditional refinancing, you still have options to pay down or pay off your partner’s debts.
Here are four options you can consider if you find yourself in this situation.
- Provide help if you're in the position to do so
- Consider a debt consolidation loan
- Consider a balance transfer card
- Consider refinancing
1. Provide help if you’re in the position to do so
You said, I do. But first, make sure you can. If your partner has a lot of debt, take a step back and evaluate the financial situation together and make sure you're able to pay some of it off monthly. That is, unless, you're planning to keep your finances separate.
If you’re helping to pay off your spouse's debt, be certain your own finances are in order, and you’re both on the same page regarding your financial goals. Encourage your partner to pay down their debt. And help out if you can.
You’ll also want to determine how you’ll pay off what's owed. Will you both make payments a combined checking account? If payments come your account, will they be repaid at a later date? Will paying off the debt put a dent in your shared plans, buying a home?
Since money is one of the main causes of arguments in marriage, you’ll want to work out all the details and crunch the numbers before providing help. This is especially true if one partner is a spender and the other is more frugal.
2. Consider a debt consolidation loan
When consolidating debt, multiple outstanding amounts are combined into one new loan, usually with a lower interest rate, more favorable terms, and one monthly payment, rather than many. You might consider a debt consolidation loan if your spouse has student loan debt, large credit card balances, or other liabilities.
But debt consolidation doesn’t eliminate debt, and the new loan will still need to be repaid. It may even lengthen the time to pay off your debt, so you end up paying more in interest.
Even so, it can be one option to consider if your spouse has many debts.
Visit Credible, an online marketplace, to explore debt consolidation loans, rates, and terms all in one place, with no impact on your credit score.
9 OF THE BEST DEBT CONSOLIDATION LOAN COMPANIES
3. Consider a balance transfer credit card
A balance transfer credit card lets you transfer one or more account balances that you or your spouse has accrued on other credit cards. This allows you to manage your monthly finances more efficiently and consolidate multiple debts. With good credit, you can move high-interest debt to a balance transfer card with a 0% interest introductory rate.
If you pay off your accrued debt within the introductory period, you’ll pay no interest, saving you money. But not everyone qualifies for a balance transfer card, and you’ll ly need a credit score of 670 or higher to qualify.
Also, keep in mind that your credit score may take a temporary hit when you apply, and you may pay a balance transfer fee — around 3% or 5% of the transferred amount. Looking for balance transfer options? Visit an online marketplace Credible to find the right balance transfer credit card for you.
HOW TO GET A BALANCE TRANSFER CARD
4. Consider refinancing
Now that you're married, your financial circumstances have changed, so refinancing for better rates and loan terms might be worth checking out.
One of the main benefits of a loan refinance is the possibility of a lower interest rate.
Right now, because of COVID, interest rates are comparatively low, making this a great time to explore refinancing options for student loans and mortgages.
Visit Credible to explore all of your personal finance options.
It’s possible to refinance your mortgage, auto loan, bank loans, and high-interest credit card debt. Suppose you or your spouse has federal or private student loans. In that case, it may be possible to refinance your loans into a new, single student loan payment, hopefully with a lower interest rate — saving you money.
You might also consider paying more each month toward your spouse’s debts or share your savvy spending and savings strategies. Create a budget, and stick to it. Having a common goal and working together to pay off debt can strengthen your marriage.
HOW TO DECIDE IF YOU SHOULD REFINANCE YOUR MORTGAGE
Dating In Debt: Why More People Are Saying No To Toxic Financial Baggage
Melissa wants to be clear: The whole idea of thinking about someone’s debt when you’re dating never really occurred to her for most of her life. For instance, the first few times Melissa went out with John (not his real name, for reasons that will become obvious shortly), she felt optimistic.
They talked easily about their jobs and friends and siblings, got each other’s jokes, shared an all-out obsession with a Burmese restaurant that they didn’t think anyone else knew about, and both agreed that John’s college band, which still lived in infamy on a long-abandoned MySpace page, was extremely bad.
In short, it was a better-than-average first burst of dates.
About two months into seeing each other, “the other shoe dropped,” as Melissa, 34, puts it now, laughing. John was carrying around $25,000 worth of student loans and credit card debt — and he wasn’t really doing much about it.
“I honestly didn’t get it. He had a great job and seemed goal-oriented about the rest of his life. But I made a comment about wanting to buy a house in the next few years, and he was , ‘Oh, well I’m probably going to be renting until I die, so…’ And the sensors started going off in my head.”
Why was this a red flag? It’s not carrying around student loans is an unfamiliar fact of life, especially to millennials.
A recent study conducted by the Brookings Institution found that the number of students graduating with upwards of $50,000 in debt has tripled since 2000.
Having debt doesn’t exactly make someone unique — but how they approach that debt can say so much about who they are and what kind of partner they might be.
For Melissa, her discomfort wasn’t so much that John had debt, but that he didn’t seem to care that much about it. “I just paid off my last student loan last year, and most of my friends are still working on theirs. I didn’t judge him for that.
But when he mentioned having “a bunch of credit cards” and had a very “shrug” attitude about all of it, it just felt we were on different pages about money.
It made me question if he would be able to fit into the life I was working so hard on or if he was going to bring me down financially.”
Melissa isn’t alone when it comes to her consideration of a prospective romantic partner’s debt and money habits. A recent Finder.
com studylaid out just how seriously most people factor in money matters when it comes to deciding whether or not someone is a viable romantic prospect, citing that 72% of people surveyed said they would have serious doubts about dating someone with significant debt.
Emotions, Logistics, and Getting Everything We Want
The notion of being cutthroat about a potential partner’s financial profile, while objectively logical, might be exactly why it feels so… unromantic, which makes sense.
The way most of us grow up imagining love — the process of falling into it and then the state of existing within it — leaves us with the idea of love as something that is mostly devoid of logic.
Love conceptually exists for most people a bit of a reprieve for the other big parts of adult life, all of which seem drearily governed by logic. Falling in love is about feeling, not thinking, or at least, that’s what most of us grow up thinking.
Once adulthood has fully come along and settled in, it’s no longer a fuzzy monolith in the future, and finding a partner to share your life with is no longer a fairy tale you’ve yet to live. It’s suddenly a real thing, and you can more clearly see the tangible impact another person can have on your life.
The reality of being in love — if we’re talking about a “I want to share my life with this person” kind of love, as opposed to a “we are both in Aruba, and I’m never going to see him again in two weeks when I go home” kind of love — is that you are not effectively just evaluating someone’s ability to give you what you need emotionally and physically, but their potential for being a strong partner in terms of creating the life you want.
Rochelle, 32, found herself suddenly considering the weight of all of these issues when her girlfriend of two years revealed she had been hiding debt for the duration of their relationship.
“We started talking about getting married, and I guess her conscience finally got the best of her.
She told me that the “small, almost totally paid off” student loan she had was actually much bigger and she hadn’t been paying on it in years, plus she had some other debt, and was basically overwhelmed by all of it and didn’t really know how to go about dealing with it, so she just kinda hid from it.”
For Rochelle, the big problem wasn’t even the money itself.
“The main problem was that she lied to me for so long. It was shocking for sure. And it really showed me how she deals with complicated, hard issues, which is that she avoided them and didn’t really deal with them at all. It goes so hard to think about spending my life with someone who responded to hard things that way.”
While her relationship with John was much less mature, Melissa essentially bowed out for the same reason: How the other person was dealing with their debt illuminated undesirable traits about them.
“It’s not that I’m looking for someone who will be my ticket to my financial goals,” Melissa says. “I just don’t want someone who is going to hold me back either.
I’ve worked really hard to get where I’m at, so if I see that someone isn’t as proactive about their financial health and goals as I am, yeah, that’s a big red flag that we just aren’t compatible.
No judgment, but that’s just not the person for me.”
And it makes sense.
It’s one thing for someone to make you laugh, but when you’re talking about hooking your life to someone else’s, it only stands to reason that you want to be sure they aren’t going to tank your whole situation.
And when you’re thinking or talking about integrating finances — even hypothetically, before the first date, when you imagine how this person might fit into your life — the stakes are huge.
How Someone Else’s Money Matters For Your Goals
When it comes to mixing money and love, it’s hard to imagine having more on the line. Your spouse’s credit can be considered if you apply for a loan, which is especially relevant in cases where you actually might need them on a loan application because your income alone isn’t enough to qualify.
If you marry someone whose debt keeps their credit score prohibitively low, you can quite literally find yourself being one person trying to carry the financial weight for two. It’s not so shocking that a growing number of people would simply rather minimize their chances of being lead by love into such a predicament by not taking people with big debt at all.
(Hey, you can’t fall in love with someone you never date in the first place!)
And if the data is any indication, most people are now navigating dating with exactly this reality in mind, with increasing scrutiny with each passing generation: According to the Finder.com survey, Gen Xers and Baby Boomers are more forgiving of debt in general, with Gen Y finding it least tolerable of all respondents surveyed.
When it comes down to it, weighing the importance of someone’s debt is completely an individual judgment call.
When factored in next to how they make you laugh, how good they are at listening, their loyalty, their adventurousness, their compassion, or whatever else you love about them that has nothing to do with their bottom line, someone’s financial profile might be an imperfection that is more than worth it in the face of all the good they otherwise bring to your life. On the other hand, if the prospect of merging lives and finances with someone whose debt would present a considerable hindrance to your ability to reach your goals for years or even decades to come… Well, a lot of people consider that too daunting to get into, and an increasingly high number of them are making no apologies for walking away.
Not All Debt Is Created Equal
That said, not all debt is not inherently toxic. Some kinds of debt are, in fact, part of most objectively healthy financial plans.
Student debt as a result of pursuing advanced degrees, for example, might put someone in the red for a few years but also dramatically increase their earning potential.
Or maybe they took out a loan in order to take advantage of a time-sensitive investment opportunity; perhaps they have a mortgage on a property that’s ly to increase in value. It comes down to what kind of debt someone has and how proactively they approach managing it.
Beyond how someone else’s debt could hypothetically stand in the way of your unfettered financial future, bringing big money baggage (which, sadly, is the total opposite of “big money bags”) into a relationship can essentially wreak the same damage as any other kind of baggage: If it isn’t unpacked and put away neatly as soon as possible, it could slow you down, wear you out, and almost definitely leave you arguing over whose job it is to carry it.
The Stress Is Real
Hesitation over getting into or staying in a relationship once you find out someone has major debt isn’t just about fear of being held back from an effortless financial future — it’s also very much about the strain that money can put on a relationship.
Sure, every couple has to endure their share of stress and even arguing about money, no matter how clean their slates are in the beginning, which is even more reason why so many people are wary of going all in with someone who is too deep in the red.
It’s not that money necessarily matters more than everything else someone brings to a relationship, it’s that more debt means more jumping off points for stress and fighting.
The undeniable truth is that money has as much of an impact on a would-be couple’s potential for having a happy, frictionless future together as other basic things inherent compatibility, mutual patience, ability to communicate, and willingness to compromise. (Although, to be fair, having all of those other things makes dealing with debt a hell of a lot easier to deal with.)
Eventually, Rochelle’s relationship ended, by her account, not because of the debt but because of what the debt revealed about who they both were.
“Dealing with her debt just brought up so many important differences between us. We argued a lot. Trust was broken.
I wouldn’t say we broke up because of her debt, but it definitely became a turning point that we never really came back from.”
For many people, thinking of someone’s debt when deciding whether or not they can see a viable romantic partnership with them in the future isn’t about separating logic and emotions, so much as it’s about employing logic to protect themselves from their emotions. It’s about deciding what you want in a partner — including a shared money mindset — and then letting your head clear a path for your heart to potentially fall in love with as few downsides as possible.
“Of course if I was completely in love with someone, I wouldn’t kick them to the curb for having debt,” Rochelle says. “I’m a team player: If I’m with you, we take on things together, no matter what they are. That’s why I to know how someone handles money before I get too involved.”