Jane from California recently found herself in a situation many married couples may never expect to face: being responsible for her husband’s credit card debt.
On a recent episode of Women & Money podcast, Jane asked the famous personal finance expert about whether she’d be held accountable for her husband’s credit card debt if something happened to him, despite not being tied to his accounts.
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Orman’s response cut through the confusion: “You most likely will be held responsible,” she said. Jane lives in California, one of several “community property states” where a spouse’s debts can legally become shared liabilities. This might sound like a raw deal, but it’s the law in nine states, including Arizona, Idaho and Texas.
According to experts, community property states treat assets and debts incurred during the marriage as jointly owned by both partners, regardless of whose name is on the account. In other words, Jane’s husband’s credit card debt could become hers because they’re married, even if she didn’t rack up a single dollar on that card.
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According to Investopedia, in community property states, debts taken on during marriage are divided 50/50 in the event of a divorce. This rule applies not only to splitting assets but also to debts, which are divided similarly.
If Jane’s husband took out loans or used credit cards while they were married, that financial responsibility could fall on her, too. But if those debts existed before they married or after legal separation, Jane wouldn’t be liable – unless she explicitly agreed to take on those debts.
However, most U.S. states don’t follow this community property model. In states like or Illinois, couples follow an “equitable distribution.” There, debts are divided more flexibly, often based on who incurred the debt and other circumstances.
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However, in Jane’s case, California’s community property laws mean her financial obligations could include her husband’s debt, whether she signed on the dotted line or not.
While this sounds grim, couples can protect themselves by signing a prenuptial agreement. For one, this agreement allows couples to opt out of community property rules.
These agreements can carve out specific exceptions, letting each person retain individual responsibility for debts and assets they bring into the marriage. In other words, Jane could have been protected if she and her husband had signed one of these legal agreements beforehand.
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Still, even without a prenuptial, couples who find themselves in a tough financial bind due to one spouse’s debt aren’t out of options. According to financial planners, the first step is creating a budget to take stock of income, outstanding debts and monthly expenses.
Tracking where every penny goes helps determine the best strategy for reducing debt, like consolidating it or cutting back on nonessential spending.
Building savings is also critical. As Orman noted, “One year is my sweet spot advice for being prepared for major financial setbacks. But if you have no emergency savings, I think making three months of living costs your savings goal is beyond fantastic.” A solid financial cushion helps soften the blow of unexpected expenses, whether from a spouse’s debt or any other crisis.
In cases where debts spiral out of control, experts recommend considering life insurance. Having a policy in place could ensure that if one spouse passes away, the surviving partner is not left drowning in debt.
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