If marriages are made in heaven, debts are created in this world. It's something you can't ignore or overlook. Again, marriage is a kind of merger.
Your financial history and capital (or lack thereof) play a role in merging, so discussing debt are crucial before getting married. An excellent question to address regarding debt is: "I have unpaid bills or commitments that you need to be aware of. Is it okay with you? Are you still willing to marry me? Do you have a strategy to deal with debt?"
While building a life together is fantastic, it frequently gives the word "compromise" a new meaning. You should be upfront about any assets or debt from the outset to prevent money from turning into a sensitive subject.
Debt depletes collective net worth and may be a source of conflict. You'll have a better knowledge of how debt will damage the marital financial future and what responsibilities you will have in paying it down if you talk about money sooner rather than later.
Why should you discuss your debts before marriage?
Should I tell my partner I am in debt? The simple answer is ‘yes.’
Let us look at a few possible reasons why you should discuss finances before marriage.
1. Marriage Requires Total Transparency and Honesty
"Building a new life with someone requires total transparency and honesty," said Timwhite from Milepro. He adds, "while they don't have to know how much you make or your detailed spending habits, it is essential to come clean about your debt problems as it will heavily impact their life too.
Your debt problem could result from an addiction, a health issue, or an underlying problem that not only should they be aware of but also could be an ongoing issue they need to know what they're getting into.
If the debt results from student loans or business failures, they should also be aware to understand how your financial planning will affect them in the future."
Since financial security is the main pillar of the most crucial component of human livelihood, it should be openly discussed. If the foundation of any relationship is comprised of secrets and falsehoods, it will inevitably end in conflict or lack of trust if the truth comes to light.
2. Because your partner deserves to know
Although it may be difficult, I think that prospective partners should be aware of each other's financial situation. Discover each other's spending patterns and be honest about any prior debt you may have racked up. This will enable partners to determine whether they are compatible.
3. It can help you avoid a divorce.
Being dishonest at the beginning of your marriage is a recipe for catastrophe. You should talk openly about money before getting married, which builds a relationship of transparency and trust that enables you to embrace marriage, knowing what problems lie ahead.
Already, one of the leading causes of divorce is money. You want to know before you say "I do"—not after—if your future spouse won't understand your financial problems and cooperate with you to create a plan. Everyone wants to work in the business with a partner they can trust, and marriage should be a collaboration.
4. Honesty is the Best Policy Since Your Debts Could Negatively impact your Spouse
Gates Little at altLINE Sobanco said, "you absolutely must reveal your debt problems before your marriage because your spouse could be negatively impacted by your debts. Those of us in the lending industry see this all the time: one partner has tried to keep their debts under wraps in an attempt to pay them off before their spouse notices, and then they try to get a mortgage or line of credit. Clearly, the jig is up at that point."
He adds that “the good news is that separate credit cards, and accounts won't impact one another. For example, your bad credit score won't affect your partner's credit score as long as you aren't sharing a card or account. I will also say that financial issues are a common cause of divorce, so perhaps honesty is the best policy regarding finances before and during the marriage.”
What should you do before marriage?
You need to be aware of the dangers involved in committing yourself to another person since marriage is a financial and legal decision—the government could care less about your emotions.
Declare all your assets and debts (including those from a previous marriage, if applicable, or financial responsibilities you have for your immediate or extended family).
You should order credit reports and scores from the three credit reporting agencies. Sit down, discuss each other's balance sheets, and discuss any issues.
You can choose how you'll manage your funds in marriage once you understand what you're up against. A prenuptial agreement might be necessary if one partner has more wealth or income than the other.
These agreements can safeguard premarital property and cover former spouses' children. They can also establish who is responsible for debts incurred before marriage and make spousal support arrangements in advance.
It's time to create a strategy for paying off your debts if you or either of you has a sizable amount of debt. Even if it does not instantly transfer to the other spouse upon marriage, premarital debt can still impact your marital relationship because it impacts your joint finances.
