How a Prenuptial Agreement Can Protect You From Your Partner’s Debt

If one partner is bringing substantial debt into the marriage, it could be beneficial for both partners to consider a prenuptial agreement. In addition, you may want to keep certain credit cards separate. While you are married, these debts will become “property” of the marital estate. They will then be divided during divorce. One spouse may be remiss about taking on the other’s debt. The best way to handle this situation is with a prenuptial agreement. In this article, the Philadelphia family law attorneys at the Law Offices of Lauren H. Kane will discuss prenuptial agreements and their usefulness for managing shared debt.

How can a prenuptial agreement address debt? 

When most people think of prenuptial agreements, they think of asset and income protection. However, such agreements are just as valuable for addressing debt. How can a prenup help when there is substantial debt involved?

• Prenups prevent responsibility for pre-existing debt – Your prenup can specify that debts incurred by one partner prior to the beginning of the marriage will remain their sole responsibility in the case of divorce.

• Defining debt repayment plans – A prenup can establish guidelines for how debts amassed during the marriage are treated in the case of divorce. These can include joint credit cards and business loans. If one spouse uses a joint credit card to make personal expenses, the prenup can establish who is responsible for repaying that portion of the balance.

• Protecting your assets from debt collectors – If one spouse defaults on a loan or faces a creditor lawsuit, a prenup can protect the other partner’s individual assets. For example, the prenup could shield the other partner’s personal savings, real estate, or investments from being used to settle the debt.

• Managing student loans – Student loans are among the most common forms of debt in today’s world. A prenuptial agreement can specify that student loan debt brought into the marriage remains the sole liability of the spouse who initially took it on.

• Ensuring financial fairness – Prenups allow both partners to define their financial responsibilities in a way that affords both partners transparency. By addressing debt in your prenup, you can reduce the risk of resentment during the marriage.

Professional guidance when drafting a prenup 

Drafting a prenup that addresses debt requires careful planning and professional legal advice. The Philadelphia family law attorneys at the Law Offices of Lauren H. Kane can ensure your agreement is tailored to your and your spouse’s specific financial situation and meets all the legal requirements of an enforceable contract.

Our attorneys will identify assets and liabilities which can help you and your partner fully understand your financial picture. We will also highlight relevant state laws governing debt and asset division. We will then help you draft an enforceable agreement that reduces the risk of legal challenges and protects the interests of both parties.

Talk to a Philadelphia Family Law Attorney Today 

The Law Office of Lauren H. Kane represents the interests of couples who are looking to draft a prenuptial agreement. Call our Philadelphia family lawyers today to schedule an appointment, and we can begin reviewing your financial records right away.