The Modern Couple's Money Guide. Lesley-Anne Scorgie

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      To join or not to join — the choice is yours. Transparency is key.

      Bills and Loans

      Paying bills blows, but it is an inescapable fact of life. From a legal perspective, the person whose name is listed on the bill is the person responsible for paying it. And if the bills don’t get paid, the billing companies will harass you at home and at work, and eventually report you to the credit reporting agencies (there are two in Canada, Equifax and TransUnion). These organizations monitor your credit management history and assign you a credit score. If you have a high score, it indicates that you are responsible with credit. When bills are not paid on time or in full, your credit score will be eroded and it will become difficult to get additional credit.

      It’s in your best interest to register the bills in the name of the person who will ensure they get paid on time and in full. It’s very important to note that if your name is not on the bills, you do not build credit even if you live in the same house and have a joint bank account. So, if you want to build a positive credit record, put the bills in your name and pay them on time and in full.

      Often, partners bring existing bills or loans into their union. For ex­­ample, one person could have a $20,000 student loan while the other has no debt. Legally, you aren’t held responsible for any debt assumed by your partner prior to your union — just the debt and bills accumulated during your union. But, in some form or fashion, you are responsible for everything because you have to live with your partner’s cash-flow limitations.

      Take, for example, Alicia. She has a massive line of credit of $90,000 from a business that she started a few years before meeting her partner, Max. The business went belly up and Alicia is stuck making payments of $900 per month on the line of credit. Max gets frustrated because Alicia’s debt is preventing them from purchasing a larger home. Yet Max had nothing to do with accumulating the debt in the first place.

      Alicia and Max’s situation isn’t uncommon and could easily lead to major fights. To avoid unnecessary tension, they’ll have to create a plan to eliminate the line of credit as quickly as possible. The big question is whether Max should help Alicia out or let her pay off the debt alone. I can’t answer that question for them because it’s a personal choice. But what I can share is that the faster Alicia is free from her debt, the sooner Max and Alicia can get a larger home.

      What Are You Bringing to the Table?