2/21/2011 11:31 AM ET|
Marrying Mr. Debt? Prepare to pay
Prior debts may not fall on you, but those issues aren't the real problem. The big issue is sharing your life with someone who wildly mismanages money.
Question: My fiancé and I are planning to get married later this year. I don't have any financial issues. However, he owes about $7,000 in back taxes (not including what he is going to owe when he files this year), has a foreclosure on his record (he still owes $85,000 on that) and owes $3,000 on a vehicle repossession, which I believe has gone into collections at this point. We also just found out that he has a $55,000 tax lien against him from his foreclosure. All of this occurred before we met. He is planning on filing for bankruptcy, but I don't believe that will do anything about the tax problems.
My question is: Will this affect me in any way? We live in California. I have heard about this communal property thing. We don't have any combined accounts, but we would like to get a joint bank account. Will that open my money up to garnishment if things go bad? Also, I plan on buying a house with my sister in the near future. If I do this after we get married, but don't include him on the loan or deed, will I be affected by his past issues when trying to buy a home?
Answer: You didn't ask if you should marry a man in much worse financial shape than yourself. But that unasked question is central to this dilemma. Here's why:
Marrying someone with more than $150,000 in back taxes, liens and other bad debts will affect you. Having so many debts in bad standing, especially with more apparently popping up all the time, is a very bad sign. He may be the sweetest guy you have ever met, but his financial life is a mess. He needs to realize that he must clean it up before he marries you. Otherwise, he's just dragging you into his financial disaster.
That doesn't mean his debts from before the marriage will automatically become yours. They won't. But if he has run up this many debts in the past few years, how will he keep from adding to them after you are married? From then on, in the state of California and other community property states, creditors will be able to pursue you for his debts.
Furthermore, as a married couple, you should be deciding on financial goals together and working toward them. How will he contribute to these goals? He's working from a disadvantage here, and he is going to feel that acutely. No two people getting married are on exactly equal footing, but it's better if they are a little closer to it than you two are.
Many times a woman thinks she can help a man get on his feet (or vice versa). But it changes the dynamics of a relationship if one partner is as needy as your fiancé seems to be. Sad experience has taught many people that it's easy for their marriage to start feeling less like a partnership and more like a parent-child relationship. And it's the spouse who feels inadequate who often starts to feel disgruntled or insecure in the marriage.
I hope you wait at least a year, if not two, before you get married. Give him a chance to clean up his credit score and his back taxes and other debts on his own. If he's determined to file for bankruptcy, he should get that out of the way before you get married. (One spouse can file for bankruptcy alone, but it can get messy.)
If he gets his financial affairs in relative order and you get married, hold off on getting credit cards, bank accounts or other accounts with him until he has a clean record for several years. Otherwise, if more creditors pop up and you have a joint account, you could very well find your wages garnished by creditors after they are commingled with his.
Now, about buying a house with your sister: Buying real estate with someone other than your spouse doesn't always end well. One party's situation can change quickly, and then what? If the only way you can buy a house now is with your sister, and you are sure you want to do that, then at least go to a lawyer and make certain you're both covered no matter what happens.
If you buy a house -- with or without your sister -- the credit history and score of your fiancé (or your husband by that point) shouldn't be taken into consideration as long as you don't include him on the loan.
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis."
VIDEO ON MSN MONEY
While I agree that financial responsibility is a must in any marriage, I would also like to know more of the facts surrounding this girl's fiance' and his financial dealings. Was his debt incurred due to a failed business, failed real-estate, having to live off credit due to the economy? Which last time I checked the majority of America has 48% credit debt on average. Most of Gen-X ( my age group) live well past their means and income, including homes they cannot realistically afford, simply put, living an image rather than reality.
My second battery of questions: How is he living his financial life now? responsibly? Is he cleaning up this mess on his own or with a financial advisor? All of these come into play here, not just the bashing I see most of you doing.
Lastly: Relationships. Most of us place emphasis on what our potential spouse has in assets, investments and salary, rather than who that person is and what he or she does for you as person. I know so many women and men who are in marriages for financial security and the assets, yet are miserable in the relationship, have little emotion towards one another and truly don't have a clue what love and committment is. As for the inital poster, you have to examine what his actions are now and going forward, not only towards you, but in addressing his financial responsibility.
None of us here have made sound financial decisions all of the time, some have made better ones than others, some are risk takers and some just don't care. I would love to see the truth behind some of you and your money after reading some of the insults to this man.
You know.....I am really HOT.....I don't cry when I make a choice about a life decision. I don't cry out about the race card, even when I feel that is the situation. I don't cry when things don't go my way...and I am not crying now. I am pissed. Listen, you need to check yourself with the title of this article. I married a woman that had a great credit score...approximately 200 pts higher than mine. I made decisions, that I am not crying about, that cost me a lot financially. I had circumstances happen that were even illegal that deferred me from getting my Masters degree even. Then I met this woman...I married this woman, but understand even though I was working two full time jobs I NEVER cost her more than I was willing to give her. While I had BILLS prior to our marriage, so did she. When we got married it was HER credit scores that helped us get our home, but the home equity line of credit taken out on this home went to pay HER prior credit/medical/and other bills. While I have 20,000 dollars in financial aid to pay back I am paying 50% of the house payment, and all but 140.00 of the 540.00 a month to pay back that home equity line of credit that DIDN'T go to pay MY bills, but HERS. She wanted the first vehicle we saw after we were married even though I wanted to shop around and we ended up with a $30,000 SUV. Now she needs a car to replace the work car she had because the SUV burns too much gas so guess what ???? I will be paying for a car payment to make sure she has a car.....I understand the meaning of the title of this article and have spoken to my daughters about this....but you need to understand something...the road goes both ways...like I said I don't cry about much...especially my choices....but you need to remember.... the...road runs in TWO directions.....
Just Sign ME What You Should Have signed Your Article
Marrying Mr. (or) Mrs./Miss/Ms Debt? Prepare to pay
(and please don't tell me that me taking on this one sided situation is still considered a man's J.O.B. and still cry about equality)
Check your facts before you begin spouting your comments. When I hear someone use the term "deadbeat" in a context that tries to include those that are victims of an overzealous system to remove their children from them and then call them names, it shows the intelligence level of the person laying the claim.
Don't be fooled by a media and political firestorm of ridiculous claims aimed at fathers who have been "worked" in the system. If you care to review the numbers, there is a higher PERCENTAGE of deadbeat moms then there are deadbeat dads. When women are put in the same situation, they fail even more often than men. Should the system then be reversed to give custody to the father and see what happens to your supposed dynamic? Right, that would just be unconstitutional to take children away from their mother...even if she is one of the 70% of divorces that are requested by women.
You arrogantly put this out there as if it is fact, whereas in reality, of all the dads who have been removed from their families and given a debt they can't possibly pay, only 4% of those who are not paying can actually afford to pay. So the other 96% of "deadbeat" dads as you call them have been sabotaged by a system that is apparently determined to wipe them out and call them names. The deadbeat moms...even though there is a higher percentage...removed from the negative hype and name calling. I'm not surprised you are in the ranks.
So it really depends on what you call freeloading mooch men/women now doesn't it. If a man stays at home and his wife works, guess he's a mooch man. If a woman stays at home and the husband works, she is a dedicated wife and victim of a male-dominated society.
Bottom line, regardless of gender, don't marry anyone with more debt than yourself, regardless of gender, and never pay off "their" debts as a show of your devotion. NEVER allow anyone you marry to stay at home while you work. They system then believes because he or she is used to it, the working spouse now needs to continue to supply it past the marriage...no matter who wanted out.
I couldn't agree more Alan Morgan (Lexx)!
Isn't it said by respected economists that women make upwards of 80% of household purchases/ decisions? And that the new/ emerging economy is going to favor women and places to invest are in purveyors of women's apparel etc...?
The article is likely good advice to both men AND women but the gender bias of the author's headline told me to 'skip it.' There isn't enough male-bashing going on in this world/ country.
Whether the headline is intentionally sexist or 'merely' an oversight, it doesn't matter. It illustrates an all too oft accepted mentality of 'demonizing' only men. Look at so much advertising: The black or 'goofy' hat is 99% worn by the male whereas the 'victim/ put upon' white hat is worn by the female. Look for it, you'll see it.
Take a look some time at men's and father's rights groups seeking equity and you'll see 'inclusion' of the female in the equation of equal representation and participation in marriage/ child rearing/ visitation etc...And whereas too many female (feminist) authored articles vilify the men/ boys (sometimes subtly and sometimes explicitly).
There are lots of women (single/ married) making lots of money and often more than their boyfriends/ husbands. Won't be long in the emerging 'Pink-collared' economy where women will start paying alimony and child support to the hard-hit men of the once male-dominated economic powers that be...err...were.
When I married my wife, I married into a mortgage on a multimillion-dollar property. It wasn't her fault, she inherited the place from her parents who have passed on. About the time we met, the mortgage mess happened and now the house isn't worth beans compared to what it used to be. On the one hand, it's been a struggle, especially since she lost her job right after we got married, and I wasn't making much to begin with. On the other hand, the financial woes have actually brought us closer, because we've been forced to work as handymen together as a married couple to make ends meet. We also, with the help of lots of friends, have repaired a small apartment building attached to the house, and now we're almost ready to rent it out for a nice amount monthly.
The point is, from a sheer numbers standpoint, it was not something that would be recommended. But hard work, true love, and faith in God has kept us from going under . . . or from splitting due to the money issues. When the markets return in five or ten years, we'll be glad we held onto the property as it'll be worth a ton more than before with the improvements we've done. In the meantime, we live on oatmeal and the Wendy's dollar menu until we can get the apartments rented and get that mortgage off our backs. And you know what? As a young married couple, we have survived more in less than three years, fiscally speaking, than many people face in a lifetime. But then, I knew what I was signing up for, and my wife is as frugal as I am.
And again, it wasn't her fault that her parents took out money to buy the house and then died.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
RECENT ARTICLES ON DEBT MANAGEMENT
Hurricane season is coming. But storms can happen at any time. Here are six smart things to do to get your home ready before the storm hits.