Debt and marriage: Why you may want to consider bankruptcy before marriage

You’re in love and your intended spouse is absolutely perfect — except for their money problems.

Money issues are one of the biggest sources of stress for married couples, and a major reason for divorce. If your spouse is carrying a significant amount of debt, it may be wisest for them to file for bankruptcy before you tie the knot.

How your spouse’s debt does and does not affect you

Your spouse’s debts don’t automatically become yours when you marry. In fact, you can even get a prenuptial agreement that makes it clear that those debts will stay theirs should you ever divorce.

But your spouse’s debts can still limit you in other ways. For example, you may find it very difficult to qualify for car loans and home loans on your income alone — and your spouse’s credit and debt-to-income ratio may make it impossible for them to assist.

You may also experience some tax issues related to their debts. If, for example, your new spouse is faced with collection actions that could wipe out their tax return, you may not be able to file your taxes jointly. Filing separately is an option, but it can increase your tax rate — and it makes it impossible to claim the earned income tax credit if you have children together.

How to figure out if bankruptcy is the best solution

If your fiance is a chronic over-spender, bankruptcy may not really help the situation. If they just got in over their head through simple mistakes, a rough patch in the past or medical problems, bankruptcy offers a clean slate that can let you move forward without a huge financial burden.

Talk to an experienced Charleston attorney about your options. You may need to think outside the box for the appropriate solution.