How being married in community of property impacts your debts as a couple

11 August 2020

Understanding how your marriage contract will impact the management of your family’s finances is essential to a happy marriage and a secure financial future.

If you get married without drawing up an ante-nuptial contract, you will automatically be regarded as being married in community of property – this is the default contract in South Africa. A marriage in community of property carries significant financial implications for couples.

You and your spouse share the risks and the benefits of a joint estate. No asset can physically be divided, and you and your spouse will share equally in the profits and losses regardless of your financial contribution.

A joint estate together is only divisible upon termination of the marriage. In other words, all debt accumulated both before and during the marriage forms part of the joint estate. When you are married in community of property it literally means you are not only married to your partner, but also to their finances.

What Does This Mean for Your Finances?

Certain transactions you wish to perform will require the consent of your spouse, while others will not. For example, buying property, applying for a home loan or credit will require consent from your spouse

One of the biggest disadvantages is that you are responsible for all debt incurred by your partner – this includes debt that was incurred before your marriage. All contractual debt, such as personal loans, credit card debt, and even maintenance and child support from a previous marriage, is also included.

If one of you is declared insolvent or creditors come after your partner for a debt, you will both be liable for the outstanding debts. Furthermore, if your partner does not have money to pay the debt, you can be held responsible for the full debt, not only 50%.

How you can regain financial control as marriage partners

Couples who manage their finances together stay together, or at least that is the case for those married in community of property.

If you and your partner find yourselves under a mountain of debt there is no point in playing the blame game. You need to be supportive of one another and find a solution that will benefit the family’s finances and create healthy financial habits going forward.

Take the first step towards focusing on your personal finances