- Minnesota is a common law state for family law.
- Spouses are not responsible for the other spouse's premarital debt.
- Consider a pre-nuptial agreement to spell out your liabilities.
Is a new spouse responsible for the other spouse's debt upon marriage in Minnesota?
My fiancée claims that once we are married in the state of Minnesota that he will be responsible for all my current debt. So we can't get married until I pay it off. Is there any truth to this? Note: he had to declare bankruptcy and had their home foreclosed on because his first wife ran up $250,000+ in gambling debts.
Your fiance is incorrect if you plan to reside in Minnesota, if my understanding of Minnesota family law is correct (attorneys licensed to practice in Minnesota are welcomed to comment below). Minnesota is a common-law state when it comes to family law, unlike Wisconsin, California, Texas and the other community property states. If you plan to reside in one of the community property states then your fiance's interpretation of the law is correct.
Under Minnesota 518.58 Division of Marital Property, dividing property at divorce, "The court shall base its findings on all relevant factors including the length of the marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, needs, opportunity for future acquisition of capital assets, and income of each party. The court shall also consider the contribution of each in the acquisition, preservation, depreciation or appreciation in the amount or value of the marital property..."
This language is contrary to community property doctrine and is consistent with common-law family law.
It is understandable your fiance would be reluctant to marry someone with debt after being married to a partner who racked-up $250,000 in gambling debt and caused a foreclosure. If you plan to reside in Minnesota then your fiance has state law on his side. However, to protect both of your interests if you move to a community property state unexpectedly, then consider a pre-nuptial agreement that spells out your rights and obligations regarding the debts you incur before and during the marriage. Consult with an attorney who has experience in family law to draft such an agreement.
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Dealing with debt
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q2 2022 was $16.15 trillion. Housing debt totaled $11.71 trillion and non-housing debt was $4.45 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
Each state has its rate of delinquency and share of debts in collections. For example, in West Virginia credit card delinquency rate was 5%, and the median credit card debt was $410.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.