Going through a relationship where one partner brings in a suitcase of debt can make you feel concerned especially if you don’t know much about personal finance and the law guiding it. Even if you know about it, you can still be somewhat worried that their little baggage may affect you.

Imagine you’re cozying up with your significant other, sharing dreams of future homes, travels, and other things. Then, the whole debt thing pops up.

First off, you should breathe easy knowing that your partner’s debt doesn’t magically become yours just because you hold hands and watch movies together. The Canadian law sees you two as separate entities, each with your own financial burdens to bear. 

However, things might take another turn if you decide to tie the knot or become financial partners in some significant way. That’s when their debt can start feeling like a bit of a third wheel. That is, unless you take some financial steps together, their debt is theirs alone. 

How it Could Affect You 

Lily found herself in love with someone who had a mountain of student loans and credit card debts. They were both young, full of dreams, and ready to take on the world together. But as they started planning a life together, Lily realised that this mountain wasn’t just his to climb; she was roped in too. Every time they talked about saving for a house or planning a trip, he either discourages her or unable to support because he has little cash left at the end of the month after settling his debt.

This little story could tell you how intertwined our lives become with our partners’, and how their financial health can influence everything from daily decisions to long-term goals. It’s not just about the numbers, it’s about how those numbers translate into postponed vacations, delayed home buying, or even the stress that sneaks into what should be your happy moments.

Communication is Key 

Communication is a golden key in every relationship. Lily and her partner sat down and laid all their cards on the table. It wasn’t an easy chat – there were fears, a bit of embarrassment, and even some tears because there was so much emotions in the air. They started budgeting together, prioritising debts, and even found ways to make extra payments. 

First, know what you’re signing up for. If you’re getting serious, it’s time to have the “financial health” talk. It’s not romantic, but it’s less painful than finding out about a six-figure debt when you’re applying for a mortgage together.

Second, remember that while you’re a team, you don’t have to merge your finances completely. There are ways to support each other without becoming legally liable for your partner’s past financial decisions. This might mean keeping some assets or accounts separate or being strategic about whose name goes on the next lease or loan application.

Lastly, and most importantly, tackle it as a team. The weight of debt can feel lighter when shared, not in the literal sense, but through emotional and strategic support. Whether it’s budgeting, cutting costs, or finding creative ways to increase your income, there’s power in tackling it together. This doesn’t necessarily mean you will help them in paying their debt. It means you can make the process easy for them by being supportive and making the whole process smooth for them.

In the end, debt is just one part of your partner’s story, and it doesn’t define them or your relationship. However, if your partner or spouse’s debt is beyond what you can manage, you can speak with one of our debt experts at EmpireOne Credit.

Are You a Cosigner?

Let’s talk about the legal side of things. In Canada, your partner’s debt doesn’t automatically become yours when you tie the knot. However, if you co-sign a loan or if the debt is linked to a shared asset, like a family home, then you might find yourself in the financial mix.

For those considering marriage or a common-law partnership, a prenuptial agreement or a cohabitation agreement can be a good idea. It’s not a romantic gesture, but it’s a practical one that sets clear expectations and protections for both parties.

And let’s not forget about building an emergency fund. Life is as unpredictable as a sudden snowstorm in April. Having a safety net can help you weather unexpected expenses without adding to your debt. 

Seek Help 

Like it was earlier established, what if the debt feels too mountainous to tackle alone? That’s where a credit counsellor can step in. You can speak with one of our credit counsellor at EmpireOne Credit, you will get more insight into what step you could take to manage your debt better and get rid of it for good. We offer a confidential and friendly consultation, so you need not worry about being judged. We understand and we care. Your debt can be reduced by up to 80%, and interest will stop immediately. Call us at (416) 900-2324 to schedule a free consultation with us. Being debt-free feels good!