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How to protect your finances when our partner has debts?

Caring for the security of your finances is extremely important. They ensure survival for us and our loved ones, and if we have them responsibly and gather them enough, we can even use them to satisfy our desires and please ourselves. However, the security of our money is not always completely in our hands. By getting involved with a new partner, our finances will be somewhat dependent on each other. From going out to dinner or to the theater together, buying gifts and souvenirs to each other, saving money together for holidays or renovating an apartment. However, before entering into marriage, they are not formally and legally bound, but only through our actions. A lot changes when you get married. However, more and more people in Poland are in debt. Currently, their number is as much as 2 million 730 thousand. What can we do if our partner is in debt and this threatens our finances?


Common property and personal assets

Common property and personal assets

When two people stand on a wedding rug, a number of important changes occur in their lives. Apart from joining a new life path and breaking the single status, they will be treated a little differently in the eyes of some aspects of the law. The way they approach their finances, settling taxes or accumulating assets will change. If, as is usually the case in Poland, they decide to have a property community, it will mean a merger of their assets. In order to be clear about the affiliation of different parts of this property to individual partners, a joint distinction is made between joint property and personal property from the time the marriage is concluded.

Personal property is all the goods that were collected by the person before the wedding, but also the donations and inheritances he received. Joint property means all assets accumulated by both partners after the marriage certificate, including payments for their profession or income from other services provided by one of the spouses, income from multiplying joint property or funds accumulated on bank accounts. In other words, these are all financial resources and material goods accumulated by both or any of the partners after marriage.


Common assets, joint debts

finance loan

So if we can accumulate money together, it means that we can also dispose of it together. Of course, in marriage, all important money decisions should be made together to avoid unwanted arguments and quarrels. If, together with our partner, we decide to take out a loan, e.g. to buy an apartment or a car, repayment of this liability will be our common responsibility. In this case, if repayment from the pool of our joint property turns out to be insufficient, our creditor can also reach for our personal assets.

However, what happens in the case when the loan was taken only by our partner? If we have been informed by the partner about the loan taking plan, the law will treat it as our consent. Then, as the debt was incurred by our partner, he is responsible for paying it back with his personal property. However, if it is unable to repay the liability with these assets, the bank has the right to demand repayment with joint property. Then we can suffer too.

It is also possible that the partner took out the loan without informing us. Then the creditor can demand repayment only from the personal assets of the partner who took the loan. However, it is possible that the personal property of the indebted person is too small to satisfy the creditor. Then he has the right to apply to the court for a separation of property between spouses. When this happens, the bank may take over the part of the joint property which after the division falls to the indebted partner. So it can be half the shared apartment or the contents of a savings account. More about property separation later in the article.

The case is slightly different in the case in which the creditor is ZUS or the Tax Office. They are legally privileged creditors. Let’s assume that our partner has his own business. If the debt arose as a result of non-payment of liabilities to ZUS or avoidance of due taxes, our creditor may take not only the company’s assets, but also the joint property of the marriage, which results from the principle of joint and several liability for the company’s debt. Fortunately, in this case our personal assets remain safe.


Property separation

financial loan

The solution that can give a sense of security to those whose partners run a business with high financial risk is asset separation. Property separation, also known as intersectionality, is an increasingly popular option. In Poland, the decision to separate assets in 2016 was taken by 58.4 thousand in Poland. par. If we are worried about our finances, due to the spouse’s running a company that operates in a crisis sector or is prone to excessive debt, we should consider this option. What is this about?

In a nutshell, material separation means that there is no such thing as joint assets of the partners. Instead, there are two personal estates. All properties of a pair have a clearly defined affiliation with one or the other partner. If the wife bought the microwave, it belongs to her, not both. If one of them takes a loan on himself, even with the consent and knowledge of the other, then in the case of debts, the creditor cannot seize the property of the other person. Of course, you can still support each other financially and take out loans together, then they will simply be treated as if they were taken together by two friends, with no joint property.

Property separation can be established by entering into a marriage certificate or applied for later. If we do this at the beginning of the marriage, it will be a little easier because you will not have to share the current joint property, as it has not yet been accumulated. If we want to do it in the later years of marriage, e.g. because our spouse wants to start a business that may involve financial risk, all you have to do is go to a notary’s tax. It doesn’t cost too much. Its amount is regulated by the Regulation of the Minister of Justice of 28 June 2004 on the maximum rates of notary fees (consolidated text of the Journal of Laws of 20 February 2013, item 237). The maximum rate is $ 400 plus 23% VAT. As this is the maximum rate, many notaries can expect to pay less for it. If the property is large, these costs may be valued to determine fair distribution. If none of the spouses asks to determine the inequality of property, the joint property will be divided equally.

Of course, the most advantageous solution is to prevent such debts from arising. Thanks to this, we protect our partner against financial problems and save ourselves from marriage problems. The basis of a successful relationship is communication. If we ensure the free flow of honest messages between partners, we are able to avoid serious problems. Finance in particular tends to arouse emotions and make people different. Talking with your partner about finances, although sometimes not easy, is an important element of a successful relationship and can protect it from impacting the sandbar.

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