Does Debt Review Affect Your Spouse?

Debt review may or not affect your spouse’s credit record depending on what they have agreed to guarantee your debt. Debt review is a wonderful to manage insurmountable financial challenges such as too much debt. It can help you stop living paycheck to paycheck by consolidating all your debt into one payment with potentially lower interest rates or even lessened payments. Different marriage regimes (community, or joint ownership of property) have different effects on your partner’s–or your–credit record. Let’s take a deep dive into how different ways of sharing debt within a partnership can affect your or your partner’s credit record. This article answers whether debt review will affect your spouse. 

What’s community of property?

Community of property in a partnership means that if you don’t explicitly sign an antenuptial contract (agreement specifying that both parties in a partnership retain their respective assets.) Generally, if you don’t sign a prenuptial agreement (also an antenuptial agreement), by default you and your spouse will enter a community of property agreement that says their estates are automatically combined. It also means that you both share debt accrued before and during the marriage.

Community of property and debt review

If the two of you are in community of property, then if you’re under debt review, your partner automatically is, too. They will need to consent to the process and their income will be considered when determining affordability and possible debt restructuring. Both of your credit records will be affected by the debt review listing.

Debt review in community of property can be tough.

When you’re not in community of property

Debt review will not affect your spouse when you’re not in community of property, as your finances and creditworthiness are separate. There are exceptions, though: if you have joint debts with your spouse, both of you will be liable for those debts, and the debt review process might involve both parties depending on the specific situation. Also, if you guaranteed your spouse’s debt and they default, you might be held liable and your credit score could be affected.

Consult a debt counsellor or legal professional for specific advice tailored to your situation and marital regime. Cape Town Legal Consultants can clarify the impact of debt review on your spouse and guide you through the process effectively. Contact Cape Town Legal Consultants today for help with debt review removal tailored to the constraints of your marriage regime.