Dear Moneyologist,
Can you put a price on love? The unfortunate answer, especially for many millennials trapped in student debt, is “you have to”.
Consider the plight of a Jennifer. She writes the “Moneyologist” Help! My fiancee has $90,000 in student loans. Should I call off the wedding?
From Jennifer to the Moneyologist
Dear Moneyologist,
I am in love with a man. We have been together for almost three years and are looking at the possibility of getting married. The one issue is that he has quite a bit of student loan debt. It amounts to about $90,000. He has had trouble paying this student debt. The Department of Education garnishes his wages, and he cannot own any property without the fear of having it foreclosed on because of his student loan debt.
If we are to get married, what would I be responsible for? Would my wages get garnished? Would my bank account be subjected to being frozen and money taken out of it? Could we have a joint bank account without the fear of that happening? If we were to jointly own a house would we still be in danger of foreclosure due to his student loan debt? Also, if we were to have a child would my husband be able to claim hardship and not have his wages garnished anymore?
Moneyologist’s Reply
Dear Jennifer,
Let me put your mind at ease: You do not accept responsibility for his debts by marrying him. So, no, your wages would not be garnished as the wife of a man with $90,000 in student debt. It’s his John Hancock on these loan agreements, not yours. And, no, your bank account would not be frozen or garnished because you marry him. However, if you had a joint bank account, that’s different. It’s possible that the government could garnish money from that. The Department of Education takes loan defaults very seriously. In most circumstances, creditors in Ohio — your home state — can only garnish up to 25% of your wages.
Any asset is potentially at risk when it comes to student loan defaults. “The Department can also file the judgment with the county records office to create a property lien — a notice to the world that you owe money,” according to Rauser & Associates law firm, which has offices in Ohio. That said, although borrowers who default on federal student loans cannot qualify for a Federal Housing Administration or Veteran Affairs mortgage, the federal government cannot generally foreclose upon a home to repay a defaulted student loan, says Mark Kantrowitz, publisher and vice president of strategy, Cappex.com, a website that connects students with colleges and scholarships.
Married and engaged couples often say they’ll do one thing when it comes to their joint finances, and then do another. Some 51% of engaged couples said they intend to equally share financial decisions, but only 37% of married respondents said they actually share the responsibility equally, according to a survey carried out by information management services company TransUnion of 1,000 people engaged to be married within 12 months. (And, while we’re on the subject, only one-quarter check their partner’s credit score before walking down the aisle.) Can you put a price on this love? You may have to, and the price tag might be $90,000. If and when you marry, your vows will likely say “till death — not debt — do we part.”
Mish’s Reply
Not to worry Jennifer, they cannot foreclose on your house. They can “only” put a lien on it so you cannot sell it for a profit later on down the road.
They cannot take all your wages, they can only take “25%” of them.
Maybe this guy is a gem, maybe not. Have you considered just living together instead?
His credit score? It’s guaranteed to be in the gutter. Is there anything else you are missing? Auto loans? Credit card debt? Borrowing from friends?
The price tag of love may be $90,000 or it may be substantially higher. Find out.
If you do decide to get married, don’t open any joint accounts. And you must still expect to pay back $90,000 one way or another.
Is your man worth $90,000?
Only you can answer that question. Perhaps a musical tribute will Help! you decide.
[youtube https://www.youtube.com/watch?v=yWP6Qki8mWc&w=500&h=360]
If that did not Help! then please consider Can’t Buy Me Love.
[youtube https://www.youtube.com/watch?v=uxha1IUsSPI&w=500&h=360]
Mike “Mish” Shedlock
