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Prenuptial agreements can be used for a variety of marital reasons, and one of those reasons is for debt protection. The average American has more than $38,000 of debt, and this does not even take into account home mortgages. Millions of Americans are so deep underwater on their mortgages and other loan payments that they are will likely end up being in debt until the day that they die.
Surprisingly, Americans are taking on more debt each and every year, despite knowing the consequences. Credit card debt is now tied with home mortgage debt, followed by student loans and car loans. The later comes as little surprise when the average new car price tag comes in at more than $37,000. The last thing that you want to do when you marry the love of your life is to begin worrying about your spouse’s high debt and financial troubles. After all, financial turmoil is one of the most common stress points in marriage.
Debt acquired before marriage is not the legal burden of the other spouse. If your soon-to-be-spouse has a $40,000 in student loans, you will not suddenly be responsible for that debt when you marry. Similarly, if your spouse fails to make timely payments on that debt, your credit score will not suffer as a result. However, if you are a co-signer with your spouse onto a credit card or other type of loan, you will be held financially responsible for that debt, even if you end up not doing any of the spending.
Moreover, if you have joint bank accounts or stock, the debt that your spouse takes on during the marriage could affect you if a creditor goes after those assets. Moreover, even if you are not a co-signer on a loan, such as a student loan, it could be argued that you benefited from your spouse attending college, and therefore you may be held responsible for paying off that debt. A prenuptial agreement may be a good idea to separate your finances if your fiance has a lot of debt, or you come to realize that his or her spending habits could get you in trouble down the road.
A prenuptial agreement will put you in a good position if your spouse takes on debt during your marriage or if he or she makes unfortunate business or spending decisions. To learn more about how a prenuptial agreement can protect you, call the Law Office of Martoccio & Martoccio at 630-920-8855 to schedule a free consultation with one of our experienced DuPage prenuptial agreement attorneys today.