Finances often play a leading role in relationship problems, in fact, a 2014 poll by Ontario-based Trustees Hoyes Michalos showed that a significant number of relationships face debt challenges from the very start. Communication also appears to play a significant factor in paying down debts – respondents who did not discuss their debts prior to walking down the aisle were more likely to be among those adding to their debts instead of reducing them together.
One couple, two financial blueprints
Despite sharing a household, a couples’ finances are legally quite separate. It’s a common misconception that one spouse automatically becomes responsible for their partners’ debts. This is completely false; there is no automatic liability for debts created by virtue of marriage or cohabitation. Even one person filing for bankruptcy (or making a consumer proposal) does not automatically assign their spouse into the same. Make sure you know the facts about who owes what!
Unless a spouse has signed explicitly to be responsible for their partner’s debts, there is no ability for a creditor to try to collect from an individual who does not owe this money.
Care should be taken before agreeing to co-sign debts. You are ultimately giving the creditor another set of pockets to collect from should the debt go unpaid.
Some financial Do’s and Don’ts for couples
DO:
Set aside time to talk about where your finances (shared and separate) are at. Be honest with your partner about your financial situation.
Work together to create a budget for the household. If you have separate obligations try making three budgets; one to share, and two separate/personal budgets.
Set financial goals and be supportive of each other. Money skills take time; be sure to celebrate your shared successes.
DON’T:
Ignore bills and assume your spouse is taking care of everything. It’s important for both people to remain involved and informed.
Play the blame game. A plan of action is far more useful than accusations.
Be afraid to ask for assistance. If the financial problems are beyond your resources, there are professionals available to help you. Financial counselors, bankruptcy trustees/proposal administrators help many couples trade financial burden for freedom.
With over 25 years of experience, Sands & Associates is BC’s largest firm of Credit Counsellors, Proposal Administrators and Licensed Insolvency Trustees focused exclusively on assisting individuals and small businesses achieve their “debt free” goals.
To meet with a representative for a free, confidential consultation in one of our 15 BC offices, please contact us.
The post Relationships and Debt appeared first on Sands & Associates.