According to a study by the National Endowment for Financial Education, roughly 41% of Americans admit to committing financial infidelity (i.e. hiding debt or other financial factors) against their partner or spouse with whom they combined finances.
Some of the reasons for this secrecy included:
- Embarrassment about their debt
- Fear of their partner’s disapproval over certain financial decisions
- The belief that some aspects of finances should always remain private
But even the smallest of financial secrets can build over time and cause serious, long-lasting damage to the relationship. Here are 3 major reasons why honesty is always the best policy—especially when it comes to your debt.
- Better Now Than Many Years into a Marriage
Marriage comes with countless decisions—from having children to changing careers to developing an estate plan. Although one spouse may believe they can handle their debt on their own, making these critical decisions will be impossible unless everything is out on the table.
If both partners are transparent about their debts before they marry, they can develop a plan to pay off all debts in a fair and reasonable timeframe. The person with less debt will be much more likely to hear and understand their partner’s situation than if their partner hides it for many years.
- State Law May Hold Both Spouses Liable for Debt
In most states, each spouse is only liable for the debt that is in their name. Nevada, however, is one of the nine community property states, which means both spouses are equally liable for all debts accrued during the marriage.
As such, debt collectors may come after either spouse. If they obtain a court judgment, they may even seize property, place liens on assets, or garnish either spouse’s wages. Additionally, if the couple divorces, a family law court may consider both spouses equally liable for debt during the asset and liability division process.
- You Likely Have More Solutions Than You Realize
Keeping debt a secret may feel like the easiest option, but confronting it head-on can save you from years of financial hardship and compromised trust in your relationship. With everything out on the table, you and your spouse can determine whether a debt-relief solution like bankruptcy may be in order. You may even consider forming a prenuptial or postnuptial agreement so each of you remains protected through the course of your marriage.
Retain Support Today to Ease the Burdens of Tomorrow
Debt is not just a financial problem. It weighs on us emotionally, it affects our relationships, and it interferes with our short-term and long-term goals. At Hurtik Law & Associates, we understand how challenging this area of life can be, and we want to put our 50+ years of experience to work for you and your family. Whether we help you with bankruptcy, estate planning, or a family law matter, you can trust us to treat you with the utmost respect while fighting tenaciously for the outcome you deserve.