Newly Engaged Couples Often Wonder How Bankruptcy Will Affect Them
Every so often a newly engaged couple will come into my office. When I ask them when their wedding will be, they say something like, “We don’t know. That’s why we’re here.” More often than not, one of them has filed, or is thinking about filing, bankruptcy. They want to know how it will affect their future spouse.
Unless the non-filing spouse is a cosigner for the filing spouse, the bankruptcy will not show up on the non-filing spouse’s credit report. So, they shouldn’t expect it to affect the non-filing spouse’s credit score or ability to get credit on his or her own. However, if the couple decides to purchase something jointly in the future, like a home or a car, the lender will of course look at both of their credit reports. And that’s where a spouse’s bankruptcy may present issues. If the lender won’t approve a loan based on the filing spouse’s bankruptcy, the couple may have to decide that only the non-filing spouse will be responsible for the loan.
Keep in mind, however, that bankruptcy won’t affect a person’s ability to get credit forever. The further from their filing date, the less their ability to get credit will be affected by their bankruptcy. Eventually, it will have no affect at all. Typically, a person who files chapter 7 bankruptcy can expect to qualify for a home loan within about three years of filing.
To me, the issue is less about how the bankruptcy will affect the other spouse and more about how the couple is addressing their future status as a couple and their finances. I’m always pleased to hear that they’re talking about financial issues before they get married. Disagreement about how to handle financial affairs can be one of the biggest problems that couples face.
If you have concerns about how bankruptcy may affect your fiance or new spouse, we hope you’ll come in for a free consultation with an experienced bankruptcy attorney. Our consultations are completely free and require no obligation. They last about an hour, and by the end you’ll have a better idea of whether bankruptcy is a good option for you. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.
