Oct 12

Are your spouse’s spending habits your problem?

The personal advice column in the Wisconsin State Journal recently had a question from a husband whose wife seemed to be a spendaholic.  She buys lots of stuff online, using various credit cards.  The husband’s concern was that if something happened to the wife, like death, he would be liable for the credit card obligations she had taken out.

The answer here in Wisconsin is “No”.  Only the spouse who applied for the credit, which we call the incurring spouse, is personally liable for the debt.  People are often confused, because the wages of the non-incurring spouse can be garnished by the creditor to whom the incurring spouse is indebted.

In our advice column example, only the wife would be liable for those credit card debts.  If she does not pay them, though, and the credit card company sues and obtains a judgment against her, the credit card company can garnish the husband’s wages.

This is because we are what is known as a marital property, or community property state.  Each spouse has an undivided one-half interest in all marital assets.  Wages are considered a marital asset.  Other marital assets can also be seized or attached by a judgment creditor in order to pay the debt of the incurring spouse.  Most assets for most people are probably exempt from the claims of creditors, but there is still lots of asset types which are not so protected.

Financial problems often lead to divorce, and we have seen many instances where one spouse wants a divorce because of the debts and judgments of the other spouse.

Our advice column response to the inquiring husband would be to work with the wife to get this spending under control.  If that cannot happen, it may be time to consider the divorce option.

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