One of the main causes of relationship issues is money. Finances can be a tricky topic to discuss, but hiding information from your partner or spouse could lead to trouble down the line. Many couples seek marriage counselling due to financial issues. These can lead to trust issues and can put a large amount of strain on couples.
In a recent podcast, Suze Orman, bestselling personal finance author says that a bad credit score is the one major financial red flag to look out for before marrying someone.
Business Insider reports:
“Before you ever say I do, you better know your spouse…their FICO score, their credit reports, you better be looking at their financial habits,” Orman said on a recent “So Money” podcast
“If somebody has a bad FICO score, credit score, and a lot of late payments, I would get rid of that person so fast … unless there was a good reason why,” Orman said.
“They should be telling you, ‘Sweetheart, I just want to tell you right now I’m a total financial mess. Here’s the reason why,'” she said. “If they don’t have a good reason why, [it’s] because their mess very shortly is going to become your mess. I guarantee you, financial abuse will start to happen and there will go the relationship.”
Know Each Other’s Financial Position And Credit Score
In South Africa, getting married in community of property is the generic wedding contract option offered. By default, if there is no antenuptial contract (ANC) signed before getting married, it is in community of property. All assets and liabilities owned or owed by each party are merged into one, single estate.
Many people aren’t aware that this includes debts and other money owed as well. Having lots of debt and a low credit score are indicators of poor money management. Couples should discuss their finances and be open with one another. Talking about money should be a frequent conversation which can be turned into future planning and goal creation sessions.
How Does Debt Affect Marriage And Divorce?
Depending on the marriage type, debt is treated differently going into a marriage.
In Community Of Property: All assets and liabilities brought into the marriage, as well as anything taken after the marriage, fall part of the joint estate. What this means is that in the event of a divorce, assets and liabilities get split evenly between the couple. This happens regardless of whether each spouse was fully aware of the others situation. One party may be subject to paying the other’s debts as well.
Antenuptial Contracts: All assets and debts should be declared in the process. Only assets or debts that come into the marriage afterwards become a part of the joint estate. These will be split equally between the married couple. In the case of a divorce, only the assets and liabilities that come about after the marriage are split up equally between the two parties. This happens after the antenuptial contract items have been taken into account.
If you are unsure of how to go about dealing with current legal issues or your specific marriage type – you need to chat to an expert. Get legal advice in order to fully understand your current position regarding marriage and your assets and debts.
If you have too much debt and are struggling to make repayments, chat to a debt counsellor. Vantage Debt Management will give you a free, full financial assessment over the phone. Call them today to find out how to save money and get out of debt. Vantage is able to reduce monthly instalments by up to 65% and save you money on interest and fees.