16 Apr Will my fiancé’s bankruptcy impact my credit?
Q. I’m close to marrying a guy who had a bankruptcy two years ago. He seems to have it together now – money-wise – but I know the bankruptcy could hurt my credit if I’m not careful. What do you suggest?
A. We’re glad you’re thinking about your credit before your marriage.
Your soon-to-be husband’s bankruptcy doesn’t have a direct impact on your credit score, but there are several things to know.
If you had cosigned a loan or opened a credit card with him before the bankruptcy, that would be one thing, said Karra Kingston, a bankruptcy attorney in Union City.
Even if a couple is already married, if the debt belongs to only one person, that person’s bankruptcy should have no impact on the non-filing spouse’s credit score, she said.
Looking ahead, Kingston said, if you do plan to open joint credit cards to take out joint loans and they then become delinquent because of non-payment, then you will be liable.
Borrowing together in the future may be more costly because of the bankruptcy.
“If you plan to buy a house together, his interest rates could be higher due to his past bankruptcy and some lenders may be more difficult when it comes to mortgage lending,” Kingston said. “That being said, there are many people who file for bankruptcy and are able to take out loans – however it is ultimately up to the mortgage lender. “
Whether you decide to open credit cards and take out loans with your future husband should be thought about carefully.
It seems you’ve talked about the bankruptcy, and that’s good. But you want to make sure you understand why he got into financial trouble in the first place and whether it could happen again.
“People file bankruptcy for many different reasons such as divorce, job loss, medical bills. Sometimes, life throws curve balls at people and the only way to get out from under is to be able to start fresh,” she said. “On the other hand, if your future husband just decided to rack up a bunch of credit card debt and was extremely irresponsible, you may decide that opening up joint accounts may not be in your best interest.”
If, ultimately, you want to protect yourself and not be burdened with worrying about whether your husband will fall into the same habits, the best thing to do is keep your finances separate and not to open any joint accounts or cosign on any loans, Kingston said.
But if you feel that his bankruptcy was an unfortunate mishap that probably would not happen again, then maybe opening accounts together would be okay.
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This story was originally published on April 16, 2019.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.