Can spouses avoid the pitfalls of bad credit if only one files for bankruptcy? 9 Answers as of December 04, 2010

My husband needs to file for bankruptcy. Almost all of our debts are in his name as is most of our property. As a result, I still have decent credit because I do not have a credit card. If he files by himself, will my better credit allow us to still use credit as long as it is in my name? Or will the fact that we are married make it not matter because his credit will be bad?

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Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
this is not a legal question, it depends largely on the credit and creditor.
Answer Applies to: South Dakota
Replied: 12/4/2010
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
This really depends on a lot of factors that have nothing to do with bankruptcy, such as whether or not you live in a community property state or not, when the debts were incurred, etc. If your spouse does not file bankruptcy, then a bankruptcy will not appear on his/her credit report, but if there are debts they are responsible for which are not paid, it's going to affect their credit.
Answer Applies to: California
Replied: 12/3/2010
DiManna Law Office, LLC.
DiManna Law Office, LLC. | Dawn DiManna
Yes, your credit score is separate from his. You should consult an attorney for more specifics.
Answer Applies to: New Hampshire
Replied: 12/3/2010
Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Your husband can file bankruptcy separately. It should not affect your credit score.
Answer Applies to: Illinois
Replied: 12/3/2010
Steven D. Keist, Attorney at Law
Steven D. Keist, Attorney at Law | Steven D. Keist
Yes and No. The bankruptcy itself will only appear on the credit report of the filing spouse. However, in many states (like AZ) the community property laws make both spouses liable for debts incurred during the marriage. Bankruptcy law requires that all property of the marriage be included in the Bankruptcy estate. You will need specific advice on this issue.
Answer Applies to: Arizona
Replied: 12/3/2010
    Law Offices of Michael J. Berger
    Law Offices of Michael J. Berger | Michael J. Berger
    Whether or not a spouse should file bankruptcy when his or her spouse is already filing is a complex question and depends on many factors. First and foremost, you must evaluate the debts and potential debts of each spouse. I strongly suggest that you consult with expert bankruptcy counsel with regards to the specific facts of your matter. There is generally no extra cost for a Husband and Wife to file a joint bankruptcy petition.

    Credit reports are based on the social security number of the individual. Each spouse has a separate social security number. Accordingly, not filing bankruptcy means that bankruptcy will not appear on your credit report. Whether or not this helps your credit score will depend on what debts you already have and the status of these debts. Bankruptcy discharges debt and in the long run (1 year +) tends to improve the credit scores of most people that file bankruptcy. Debts that have been discharged in bankruptcy must be reported by the credit reporting agencies as discharged in bankruptcy. This lowers the debtor's current balances and cleans up many of the debtor's problem credit entries, thereby leading to a higher credit score.

    You say that you "have decent credit" because you "do not have a credit card." It is hard to tell from this description exactly what your FICO score is and what your credit report says. We have a tool that we use (a credit report from Credit Info Net) that not only gives us your credit report and tells us your FICO score, it also predicts what the effect of a bankruptcy would be on your FICO score 1 year after the filing of your bankruptcy petition. This lets us give you a more specific estimate of the predicted affect of a bankruptcy filing on your credit score.
    Answer Applies to: California
    Replied: 12/2/2010
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    Yes, bankruptcy will only affect the filing spouse. So, the non filing spouses credit will not be affected.
    Answer Applies to: California
    Replied: 12/2/2010
    Law Office of Raymond J. Dague, PLLC
    Law Office of Raymond J. Dague, PLLC | Raymond J. Dague
    I will almost never file bankruptcy for both spouses if most of the debts are with the other spouse. Credit is separate not joint. If one spouse has good credit and only a few small debts, there is no need to file a bankruptcy petition for that spouse.
    Answer Applies to: New York
    Replied: 12/2/2010
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