Everyone knows how the typical life story goes. A person goes to college and meets their sweetheart. Shortly after college, they get married and live happily ever after. Although this tale is still the case for many couples, a college degree now often comes with a large burden of debt. How is debt affecting marriage today and how do couples say "I do" to each other without applying that to each other's debt?
A prenuptial agreement can help Millennials avoid mixing debt
Understanding the burden of debt and the consequences it can have on a married couple is imperative to understanding the effectiveness of a prenuptial agreement. Although a prenup has a negative stigma among newlyweds, that attitude could be changing. According to CNBC, legal professionals around the country see an increase in the number of young people using a prenup. Why is this the case?
Debt is often cited as the reason young people put off big life decisions such as marriage and having kids. According to MarketWatch, many people wait on marriage until they are economically stable, and the rising debt levels among Millennials could be the reason for the delay. Therefore, because Millennials are waiting until later in life to get married, they may be more likely to use a prenup.
Unrealistic expectations of marriage and debt?
Although debt levels are high among Millennials, delaying marriage can be an unreasonable expectation for couples who are ready to take the next step in their relationship. Many students may have attended college without anticipating their debt burden. Despite this, young post-graduates can still take the time to understand how to move forward with their life while proactively managing debt.
As of 2015, up to 60 percent of college students in Arizona graduated with debt, averaging nearly $24,000 per student. When couples are married, their property becomes communal property, and debt is treated no differently. A prenup can be a tool to protect marital property from the consequences of debt.
According to Time, one in six student loan borrowers nationwide are in default on their payments. If a person's loans fall into default after marriage, creditors can go after marital property such as business income or jointly held bank accounts to seek repayment.
Who pays back the student loan debt in marriage? Writing a prenuptial agreement can help young couples answer this question.