If the person you are going to marry has recently filed bankruptcy or considering waiting until you are married to file, there are a few things you should know before you start your future with a fresh financial start.
If Filed Before Marriage
If your fiance filed for bankruptcy before you were married, his credit score would not change yours. You will still be able to get credit cards and loans in your name with your credit score alone. If it is a large loan, such as a mortgage, the lender will want both of your information and credit scores. Your partner’s negative credit history will become a factor in the decision making process for the lender. You could be denied or offered a high-interest rate if his score is too low.
Depending on how long ago your partner filed for bankruptcy is how long it will stay on his or her report. A Chapter 7 Bankruptcy will remain on the credit report for ten years, while a Chapter 13 bankruptcy will stay on the report for seven years. You might want to use this information to make future plans for large purchases together.
If Filed During Marriage
If your spouse wants to file for bankruptcy during your marriage, you will need to know what chapter in bankruptcy he or she intends to file. If they are filing Chapter 7 and you have joint property, it could be taken away by the trustee to sell off to pay your spouses creditors. If they are planning on filing Chapter 13, your spouse’s monthly income will be significantly smaller as they will be in a repayment plan with the court.
If Filing Together
A joint bankruptcy is where married couples are allowed to file for bankruptcy together on one petition. When you file jointly, your combined income, property, and debts are all part of the bankruptcy.
Between you and your spouse, you might have enough exemptions to protect most or all of your property. Some states allow married couples to receive double exemptions.
If your spouse has a large amount of nonexempt property and is at risk losing it during bankruptcy, you may want to file individually without your spouse to protect his or her assets.
If you want to be able to wipe away your debt as well as keep as many assets as possible without negatively affecting your partner. It is advisable for you and your spouse to speak to a Dallas bankruptcy attorney to come up with the best plan on how to proceed with your bankruptcy.