Living together with a partner who is in debt does not have to be a problem. Certainly not if he or she simply pays the debts neatly and has no payment arrears. But make clear agreements about the debts and establish who the debts are exactly. In this way you prevent the debts from possibly causing problems in the future.
Cohabiting and partner debts
Do you live with your partner, but do you have no cohabitation contract and no children? Then your assets for the Tax Authorities and creditors remain separate. So if your partner has debts, these will remain with your partner. Debts are only a problem if your partner does not pay them off as agreed. In the worst case, a bailiff seizes the household effects. He makes no distinction between your or your partner’s belongings.
Cohabitation contract and debts
You can prevent these problems by drawing up a cohabitation contract. In this you record what belongs to you and what belongs to your partner. You also include the debts. In this way you can prove at any time that only your partner is liable for the debts and that any bailiff may only seize his or her belongings.
Student debt partner
The Education Executive Agency (DUO) calculates the monthly repayment of the student loan based on the joint income if you are allowance partners or tax partners. You are if you live together and have a cohabitation contract and / or if there is a child at the same address and / or if you apply for housing allowance together.
Did you accrue your student loan before 1 September 2009? Then you can submit a request to disregard the partner’s income when calculating the monthly repayment. But watch out! The repayment period will then be longer!
Living together with debt assistance
In a debt counseling process your partner is obliged to report it if you are going to live together. Depending on the joint income, the debt counselor sometimes changes the amount to be spent by your partner. But as a partner you never have to contribute to the repayment of the debts.
Planning to get married soon? Then you better wait until the debt restructuring process ends. As a partner, you can indeed be held liable for debts.
Cohabitation and debts – Marriage
If you get married or enter into a registered partnership and your partner has debts, you can record that you are not liable for his or her debts. Without these marital conditions, the debt-free partner can nevertheless be held liable for the debts.
Living together with debts – What can I do?
You may want to help your partner with debts by repaying the debt (in part). If you are tax partners, this has no consequences for the gift tax. But without a tax partnership, the Tax and Customs Administration sees this as a gift on which your partner must pay gift tax. Up to 124,727 euros he or she pays 30 percent gift tax and then 40 percent. The annual exemption amounts to 2,173 euros in 2019.
Another way to help your partner is to take a look at the finances together. You may be able to transfer your loan to a provider that offers a lower interest rate. Merging different loans can also provide more overview.