-
Is his debt automatically my debt because we are married?
My husband has thousands of dollars in debt that I did not know about before we got married. Now I find out and I am very stressed over this. I already pay for everything in this house, mortage, bills, you name it, I pay for it. And I'm trying to go to school right now, which is expensive in and of itself.
Yesterday I opened up a letter to him from the IRS, saying he owes X amount of money and I'm freaking out. That shit compounds every month that it doesn't get paid and I'll be damned if I go work my ass off to pay for his bullshit. But, if it is going to drag me down with him, what else can I do?
So, my main question is, is his previous debt now my debt? Because if it is, I am going to find out if I can get an annullment. There is no way I'm going to throw everything I've worked for in the garbage just because of his debt.
Any advice would be wecome. Thanks.
-
Re: Is his debt automatically my debt because we are married?
No. Unless you add your name to the account, anything he owed before the marriage is his responsibility and not yours.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
Katrine
No. Unless you add your name to the account, anything he owed before the marriage is his responsibility and not yours.
Whew. That is really good to know, especially from a great source such as yourself. Thank you.
Does that also include whatever penalties and interest grow on that debt? I hope so, but I want to make sure.
-
Re: Is his debt automatically my debt because we are married?
Where the IRS is concerned, that isn't automatically true. In general, if you are legally married, any IRS back tax bills owed in the name of one spouse are also the legal responsibility of the other spouse - and the IRS can and will go after both parties if they shift into freezing assets / garnishing wages mode. The name on the account standard only applies to 'private' debts.
However, there is an IRS doctrine of the 'innocent spouse'. This is specifically designed to provide relief in cases like the one you just described, where one spouse is unaware of the (previous) financial activities of the other spouse. However, you'll have to file for 'innocent spouse' status. And it would probably behoove you to do so before the IRS shifts into pit bull mode re collecting on your husband's back tax bill. Otherwise you may find your own bank accounts frozen and your own paychecks garnished, and you'll have a hell of a time trying to deal with these IRS actions after the fact.
In one sense you are lucky because, so far at least, you and your husband have not yet filed tax returns which de-facto inform the IRS that you are now married. But the April 15th clock is ticking. So you really need to decide whether you're going to file for an annulment well prior to April 15th, since your marital status at tax filing time can have a huge bearing on your own tax liabilities.
(snip)"Although many taxpayers enjoy substantial tax benefits from filing joint returns, those benefits may be outweighed when a tax deficiency or unpaid balance is asserted for a return. The general rule is that each spouse has joint and several liability. The IRS might also offset a current year joint refund to pay a separate obligation of one spouse. In community property states married individuals face the more onerous duty to pay taxes on ½ of a spouses income even when they file a married filing separate return"(snip)
see also
~
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
Melonie
Where the IRS is concerned, that isn't automatically true. In general, if you are legally married, any IRS back tax bills owed in the name of one spouse are also the legal responsibility of the other spouse - and the IRS can and will go after both parties if they shift into freezing assets / garnishing wages mode. The name on the account standard only applies to 'private' debts.
Interesting thread..This is one of the reasons I gave to my current guy as to why I won't marry- my finances are a wreck, & he's trying to buy a house. I would capsize his credit if I was with him.
-
Re: Is his debt automatically my debt because we are married?
We filed jointly last year, as a married couple, but he had this debt for a few years before we got married. The way I found out about it was when our tax return automatically went towards the IRS debt. At that point it wasn't really that much, and I told him then that I would pay it if he needed me to, because I had money in the bank and could afford it at that time. Now I don't.
Honestly, if he doesn't call the accountant and try to get some of this taken care of I am going to call his dad myself and tell him the situation. Sure, I could go work my ass off to pay it, but why should I? I still owe my $3K tuition bill for this semester, AND I wasn't planning on working as much while I'm tackling a tough academic schedule.
I feel like more and more, women really keep things together in domestic life. I'm not the only woman I know who pays the lion's share of things and takes care of a child and goes to school full-time. We are only human, there is a point where we can't keep giving and giving because if we do we won't have anything left. And I refuse to let my finances suffer because of his negligence on HIS debt.
-
Re: Is his debt automatically my debt because we are married?
Another question:
Our house is in both of our names, unfortunately, but I have always paid the mortgage payments. Can we do a Quit Claim to get his name off of the house? Or would it even matter? I was thinking they couldn't freeze MY assets just because of his bad debt, and if he was no longer on the house it would be on him. Of course, he has no assets so that would be kind of hard for them to do.
Ugh. I hate this. It sucks when you really come to the hard truth that you regret getting married.
-
Re: Is his debt automatically my debt because we are married?
I hear you ... I went through something similar during my own divorce, when I got stuck with a whole bunch of debts that my ex had run up without my knowledge. Fortunately my ex's tax problems were for the current year when the divorce was finalized, and I managed to get a stipulation in the property settlement that absolved me of his tax liability. As a result he wound up having HIS wages garnished to satisfy HIS back taxes, with the IRS leaving my income alone.
Well if there is already a joint return on the record, annulment is pretty much out of the question since an annulment would force you and your husband to undo last year's joint tax return but the IRS is not about to give you back the tax refund they already glommed onto. You're talking about either filing for and being granted 'innocent spouse' status by the IRS and then filing married but separate tax returns this year, or filing for divorce with a specific provision for division of tax liabilities as part of the proceeding, or sucking it up and paying off your husband's IRS bills yourself.
Quote:
I was thinking they couldn't freeze MY assets just because of his bad debt, and if he was no longer on the house it would be on him. Of course, he has no assets so that would be kind of hard for them to do.
back to the joint tax liability issue. In the absence of an 'innocent spouse' ruling PLUS a Quit Claim by your husband on the property title, your house is fair game for an IRS seizure to satisfy HIS IRS bill. Filing a Quit Claim deed won't get the IRS off of your house in the absence of being granted 'innocent spouse' status or filing for divorce with the division of assets clearly stated in the divorce papers, because as long as you are married the IRS will view YOUR assets as being equal to HIS assets. And as I mentioned earlier, in the absence of a divorce OR being granted 'innocent spouse' status by the IRS along with getting your husband's name off titles / bank accounts / loans etc., your own car, your own paycheck, your own bank account etc. will all remain fair game for IRS freezes / garnishment / seizures to satisfy your husband's back tax bill to the IRS.
I would also add that this situation also comprises an open invitation for a detailed IRS audit of last year's joint tax return, plus the previous two years of 'single' tax returns by both of you. Hopefully there isn't any 'questionable' stuff in those returns that would give the IRS an excuse to come looking for even MORE back tax money !
~
-
Re: Is his debt automatically my debt because we are married?
Actually, Melonie is correct and I was incorrect in regards to the IRS situation. They can pretty much do whatever the fuck they want.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
madmaxine
Interesting thread..This is one of the reasons I gave to my current guy as to why I won't marry- my finances are a wreck, & he's trying to buy a house. I would capsize his credit if I was with him.
Not necessarily. Aside from the IRS aspect clarified by Melonie, getting married doesnt automatically combine two people's credit.
-
Re: Is his debt automatically my debt because we are married?
apparently, at lease partly because of people selling their good credit ratings by having strangers pay to be authorised users, all credit is your own and doesn't affect your spouse anymore (with credit cards, car payments, and that type of debt). my husband's awesome credit doesn't benefit me, and my crappier credit isn't dinging him.
-
Re: Is his debt automatically my debt because we are married?
unfortunately, it does. Most states are combined property/debt states, which means that even if your name isn't on his debt or property, you share the asset/liability...which means his debts are your debts, and vice versa.
-
Re: Is his debt automatically my debt because we are married?
Can I just ask why he isn't working to pay off his IRS debt?
I agree with Melonie that when it comes to the IRS, you're kinda screwed. If your husband is not working, then he needs to get his ass in gear and pay off this debt. It DOES compound monthly.
I know that there are tax relief options where you can negotiate a settlement...but with only $3K, it may not really be worth it. He could quickly make that money to pay off the IRS.
How did he end up owing that money to the IRS? Just didn't pay taxes one year? Was he audited and having to pay that extra money? It makes a big difference. And you should find out. Then, you may want to look into innocent spouse status. As for the house, it's already had his name on it. You cannot quit claim a mortgagee off of a property in which they pay a mortgage (so if he's on the mortgage, you cannot remove his name from the title). If he is NOT on the mortgage, you can remove his name from the title, but being that you two are married, what's his is yours and vice versa.
You're in a sticky situation and I think the best thing he can do, at this point, is suck up to the responsibility, call the IRS, make payment arrangements and work his ass off to pay it off quickly. Then you won't have to worry about any further problems.
Depending on why he owes that money, you may also want to look into filing separately.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
VenusGoddess
unfortunately, it does. Most states are combined property/debt states, which means that even if your name isn't on his debt or property, you share the asset/liability...which means his debts are your debts, and vice versa.
Actually there are only a few states that are communal property states. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Wisconsin, and Washington are known as community property states.
"The community property states assumes that a married couple owns all assets and debts equally, except for separate property, and is divided accordingly upon divorce. Under the equitable distribution scheme property and debt is supposed to be divided “fairly” upon divorce. Most states follow the equitable distribution.
There is no federal definition of community property. Instead, each community property state has its own definition, which is provided in their statutes. In general, community property is determined by what is not separate property, which is property acquired before the marriage, by gift, or bequest."
All other states are equitable distribution. In these states during a marriage debt is based on who is on an account. It isn't until divorce that it is decided who is responsible for what debt.
The other issue is to make sure there are no errors on the credit reports. When marriage happens because of lender and computer errors his information can end up on your credit report. Make sure to check your credit reports. If any information on there isn't yours alone or by joint account dispute it.
-
Re: Is his debt automatically my debt because we are married?
Interestingly enough this is becoming a big enough problem that I am seeing commercials for checking your to-be's credit rating!
The one in particular is the guy playing in a band living in his wife's mother's basement because his wife has bad credit and so they cannot get a nice apartment or house.
-
Re: Is his debt automatically my debt because we are married?
Not to be a total cunt, but it's bullshit that you pay all the bills.
IMHO sounds like he's taking advantage of you...sorry maybe there is some underlying reason that I don't know about and I apologize if that's the case but...
if not...as Korn says,
Fuck that, Fuck that shit.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
Deogol
Interestingly enough this is becoming a big enough problem that I am seeing commercials for checking your to-be's credit rating!
The one in particular is the guy playing in a band living in his wife's mother's basement because his wife has bad credit and so they cannot get a nice apartment or house.
Yep, those commercials depress the shit out of me. NO wedding bells until I'm fiscally healthy...Life is a bitch sometimes.
-
Re: Is his debt automatically my debt because we are married?
I dont think (in CA) that my crappy credit (or debt pre-marriage) automatically turns over to his credit unless he was a co-signer to that - like my car.
Now, any credit I assume DURING the marriage (even tho its not in his name also) becomes his responsibility too. But anything pre-marriage, no, thats all mine baby.
Except IRS stuff - if we file jointly the yes, my debt will come from his/our return but thats because he filed MY taxes also. Had we filed seperately my IRS debt wouldnt be taken out of his return.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Had we filed seperately my IRS debt wouldnt be taken out of his return.
For the sake of complete clarity, this is not true in the absence of an 'innocent spouse' ruling by the IRS. Without an 'innocent spouse' ruling, married persons are still jointly liable for each other's tax bill regardless of their filing status. Thus without an 'innocent spouse' ruling, the IRS could indeed glom onto your separately filed tax refund to partially satisfy your husband's separately filed unpaid tax liability, or vice versa. It is ONLY through the filing for and approval of 'innocent spouse' status by the IRS that one spouse can actually avoid 'joint' liability for tax debts owed by the other spouse.
Quote:
Interestingly enough this is becoming a big enough problem that I am seeing commercials for checking your to-be's credit rating!
The one in particular is the guy playing in a band living in his wife's mother's basement because his wife has bad credit and so they cannot get a nice apartment or house.
a lot of those commercials are based on hype rather than fact. However the fact does remain that if a married couple are jointly applying for a loan that will require both incomes to qualify, and if one spouse has a bad credit score / record, that WILL come into play during the loan approval process.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
VegasPrincess
Not to be a total cunt, but it's bullshit that you pay all the bills.
IMHO sounds like he's taking advantage of you...sorry maybe there is some underlying reason that I don't know about and I apologize if that's the case but...
if not...as Korn says,
Fuck that, Fuck that shit.
I created this thread to ask for specific answers. If I wanted to discuss the details of my marriage with you or anyone else, I'd put it in the nibshit forum. Take your ASSumptions elsewhere.
-
Re: Is his debt automatically my debt because we are married?
Quote:
Originally Posted by
Melonie
For the sake of complete clarity, this is not true in the absence of an 'innocent spouse' ruling by the IRS. Without an 'innocent spouse' ruling, married persons are still jointly liable for each other's tax bill regardless of their filing status. Thus without an 'innocent spouse' ruling, the IRS could indeed glom onto your separately filed tax refund to partially satisfy your husband's separately filed unpaid tax liability, or vice versa. It is ONLY through the filing for and approval of 'innocent spouse' status by the IRS that one spouse can actually avoid 'joint' liability for tax debts owed by the other spouse.
But Im talking about pre-marital tax debt... not trying to avoid paying your spouses now due taxes.
-
Re: Is his debt automatically my debt because we are married?
^^^ still true ... if you are married now, in the absence of filing for and receiving an 'innocent spouse' ruling by the IRS in regard to your spouse's pre-marital tax bill, today "you owe what he owes" even if his back tax bill was run up before you were married.
The IRS logic on this is pretty simple - they view any outstanding tax bill as a 'current' debt obligation, and you are 'currently' married, thus you are jointly responsible. It would only be through the filing for and approval of 'innocent spouse' status that the IRS would bother to investigate that your husband's currently outstanding tax bill was actually the result of unpaid taxes on income incurred at a point in time before you were married, thus releasing you from joint responsibility.
-
Re: Is his debt automatically my debt because we are married?
-
Re: Is his debt automatically my debt because we are married?
May I come at this from a different angle? IRS will settle debts for pennies on the dollar, depending on circumstances. Lets assume $25,000 is owed, an offer of comprimise might be $5000 or somewhat less. From my point of view, this is not going to go away, penalty and interest can eat you alive, try to work out an amount that you both can live with and put it behind you.
-
Re: Is his debt automatically my debt because we are married?
Problem is - typically when you settle debts you have to have the entire amount to pay. Like you cant say ok, Ill give you $5,000 and oh BTW can I make payments? But if you do have the money to pay it now it may be worth it to try.