If one partner goes bankrupt, will it affect the others credit? 21 Answers as of June 02, 2013

If two people are not married and sign on a mortgage together, if one of them goes bankrupt, does if affect the other one's credit? And can the house be taken away from the other party if the mortgage is current and up to date?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
No marriage or no domestic partnership then you have no problems. Just keep paying the mortgage.
Answer Applies to: California
Replied: 11/15/2011
Alfred Law Firm
Alfred Law Firm | Janice Alfred
No, this person's bankruptcy filing should not affect your credit. If he discharges the mortgage debt then you will be the only one liable for it. As long as the mortgage remains current, the house will not be taken from you.
Answer Applies to: Georgia
Replied: 11/14/2011
Heupel Law
Heupel Law | Kevin Heupel
If the mortgage is current and no mortgage payments were missed, then the partner is fine and his/her credit will not be impacted by the cosigner filing for bankruptcy.
Answer Applies to: Colorado
Replied: 11/14/2011
Theodore N. Stapleton, PC
Theodore N. Stapleton, PC | Theodore N. Stapleton
It doesn't affect the non filing partner's credit as long as the payments are kept current.
Answer Applies to: Georgia
Replied: 11/11/2011
Charles R. Nettles - Attorney at Law
Charles R. Nettles - Attorney at Law | Charles R. Nettles
Presuming that this involves Texas law, you won't loose your share of the house and neither will your partner. It would affect her credit only to the extent that note will be put on that entry on her credit report to the effect that the co-signer filed bankruptcy. This should not have a real impact on her credit as long as it is current.
Answer Applies to: Texas
Replied: 11/11/2011
    Paul Stuber, Attorney at Law
    Paul Stuber, Attorney at Law | Paul Stuber
    As long as the mortgage is up to date they cannot take a foreclosure action, or would they want to, against either of you.
    Answer Applies to: Colorado
    Replied: 11/11/2011
    Weber Law Firm, P.C.
    Weber Law Firm, P.C. | William Weber
    No. A personal bankruptcy of one partner should not be reported on the personal credit report of the non-filing partner.
    Answer Applies to: Texas
    Replied: 11/11/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Co-owners of a mortgage are both liable to pay the loan. If one files bankruptcy the other remains liable. Bankruptcy is not part of the non-filer's credit report. As long as the loan continues to be paid, the lender cannot foreclose.
    Answer Applies to: California
    Replied: 11/11/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    One person's bankruptcy does not affect another person's credit - even if married to each other. As long as the payments are continued and the loan remains in good standing, the bank would not be interested in foreclosure. If the debtor elects to "reaffirm" the debt, the mortgage would survive just as if the bankruptcy never happened.
    Answer Applies to: Indiana
    Replied: 11/11/2011
    Siegel & Siegel, P.C. | Sharon M. Siegel
    The house cannot be taken away if you are current. A bankruptcy by a co-borrower does impact credit scores but not as much as a personal case.
    Answer Applies to: New York
    Replied: 11/11/2011
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    No and no. Make sure that you state in your bankruptcy petition that your partner is claiming the house as homestead and exempt it.
    Answer Applies to: Florida
    Replied: 11/11/2011
    Law Office of Marissa L. Vandersluys | Marissa Vandersluys
    If you signed onto a mortgage as co-signors or co-debtors, then you are both responsible for the mortgage. If one of the co-signors files for bankruptcy, then the other co-signor will be held liable for that debt. Depending on the terms of your mortgage and the lender, if you are still current and up-to-date on the mortgage, then the lender may work an arrangement with the non-filing bankruptcy co-signor to maintain the property.
    Answer Applies to: California
    Replied: 11/10/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    It should not have a long term affect on co person's credit. Filing for bankruptcy will not cause your home to be foreclosed if you are making the payments.
    Answer Applies to: California
    Replied: 11/10/2011
    Buff & Chronister
    Buff & Chronister | G. Scott Buff
    First, your mortgage company will not foreclose unless there has been a default under the terms of the note and security instruments. While the language in these instruments is very broad and there are many situations that could technically be considered a default, it is very unlikely that your mortgage company will foreclose when the note is current. The lender wants the loan to remain in good standing. They do not want the property. They certainly cannot foreclose the property while your partner is under Bankruptcy protection, without first having the automatic stay lifted. With respect to the credit issue, it cannot be reported on your credit report that you filed for Bankruptcy. I have seen situations where a loan is reported as included in a Bankruptcy on the co-debtor's credit report.
    Answer Applies to: Georgia
    Replied: 11/10/2011
    LAW OFFICE OF MARGARET L. EVANS, PC
    LAW OFFICE OF MARGARET L. EVANS, PC | Margaret L. Evans
    Only if the co-debtor makes late payments or doesn't pay at all. The co-debtor's credit will NOT be affected UNLESS the mortgage becomes delinquent.
    Answer Applies to: South Carolina
    Replied: 11/10/2011
    Gregory J. Wald, Attorney at Law
    Gregory J. Wald, Attorney at Law | Gregory J. Wald
    The house can't be taken away as long as the payments are current. In Minnesota, you can protect your equity in the home up to $360,000.00. Therefore, as long as you don't have more equity than $360,000.00 and the payments are current, your spouse can keep the property. If the spouse who files bankruptcy does not have ownership of the property, then it doesn't even matter how much equity there is. It shouldn't hurt the non-filing spouses credit as long as the mortgage payments are kept current.
    Answer Applies to: Minnesota
    Replied: 11/10/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Yes, it can affect the other's credit. Whether it affects the home itself depends on details you didn't post.
    Answer Applies to: Georgia
    Replied: 11/10/2011
Click to View More Answers:
12 3 4 Free Legal QuestionsConnect with a local attorney