Resolve Medical Debt Before Marriage

Dear To Her Credit,

My long-term boyfriend and I are planning on getting married in December when we visit Ohio for Christmas.

He has between $10,000 and $20,000 worth of medical debt. All of his debt is from a trauma injury and the resulting surgery and treatment. He was uninsured at the time. He plans to file for bankruptcy in the near future, but we don't think he will be able to complete the bankruptcy process before we go to Ohio.

We reside in Alaska. If we maintain separate bank accounts and don't go into any purchases or loans together, will it affect my credit if he files for bankruptcy after we get married? 

- Kelsey

Dear Kelsey,

Your boyfriend should resolve his medical debt -- and any other troubled debt -- before you get married.

When you get married, you do not become liable for debts your new husband incurred before the marriage, and his old debts do not show up on your credit report. This is true even in community property states. (Alaska is an "opt-in" community property state, which means couples can choose if they want to make their property community property.)

His debt, or filing for bankruptcy, will still affect you, however. You and your husband will want to make joint goals, perhaps buy a house, and be true partners in your new married life. His stress over unpaid bills and his potential bankruptcy puts a shadow on all that.

The two of you are much better off figuring out a plan before Christmas. If he's determined to file for bankruptcy, he should do it before then. The date of filing is generally what counts, not when the process is completed.

If the only debt he has is this medical debt, however, I hope he can avoid bankruptcy. For one thing, even the high number of $20,000 is generally not enough to justify bankruptcy for someone in his working years. More importantly, medical debts can often be taken care of in other ways.

Before he files for bankruptcy, encourage him to try these steps:

1. Check the statute of limitations. Old, unsecured debts can't follow him forever. Eventually, they become too old to collect. For Alaska, the statute of limitations on written contracts is three years. It may or may not be the same length of time for medical bills. For more information, see state statutes of limitations or consult an attorney in Alaska. If your fiance is sued for time-barred debts, he can present evidence of that fact and have the suit dismissed.

2. Contact the medical provider. If it's a hospital, have him go to the patient accounts desk and ask to speak to a representative. Tell him to bring basic financial information, including his monthly income and expenses. The hospital or other provider may consider that information and put him on a payment program he can afford. Hospitals also have committees that determine which patients cannot pay their bills in full. The committee may decide to reduce his bill substantially.

3. Try to settle. If he has some cash or assets he can turn into cash, he may be able to negotiate a lower medical bill. Because he didn't have insurance, his bill may be higher than what they would have received from an insurance company. Medical care providers would rather receive some payment than have him file for bankruptcy where they get nothing.

4. Get financial counseling. A good credit counselor can help your fiance look at his options for resolving this debt. Look for a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

If he decides bankruptcy is the only way out of his medical debt, be sure he gets qualified advice in Alaska first.

Filing for bankruptcy is no easy way out. Making payments, preferably on a reduced amount, is better than spending the money on legal and court costs for bankruptcy, and then having bankruptcy on his credit report for seven to 10 years. Talk to your fiance about facing this debt head-on and finding a way to resolve it. Then, head for Ohio with one less thing to worry about.

See related: Can you negotiate medical debt with collectors?, Getting rid of old medical debt15 tips for dealing with high medical debt