How Can My Fiancee's Bankruptcy Affect Me?

If your fiancee is about to file for bankruptcy, or has filed for bankruptcy within the past 10 years, her credit has likely been damaged. While your credit report isn't affected by your fiancee's past financial problems, you may find that the bankruptcy can take a toll on your mutual finances.

Co-signer

If you co-signed for any of your fiancee's debts before bankruptcy, or took on any debt together, prepare to be held responsible for paying these debts after your fiancee files for bankruptcy. Once your fiancee receives a bankruptcy discharge, her creditors will pursue you for the balance on your co-signed and joint debts. If you don't think that you will be able to make the necessary payments on these debts, your fiancee may wish to reconsider her decision to file for bankruptcy, or you may wish to speak to a lawyer to learn more about your options. If your fiancee files for Chapter 13 bankruptcy, you may be eligible for protection from collection activity under the co-signer automatic stay, particularly if your fiancee prioritizes the debts that you co-signed in her repayment plan.

Credit Reports

While it is true that bankruptcy negatively affects a person's credit score and stays on her credit report for seven to 10 years, your fiancee's past bankruptcy will not appear on your credit report after you get married. Your credit report reflects only your credit history, not your spouse's. However, if you and your fiancee apply for credit together, her bankruptcy may result in the rejection of your application or a higher interest rate.

Other Credit Issues

While it is illegal for an employer to discriminate against a job applicant or an employee because of a bankruptcy, if your fiancee has a bad credit score, she may have difficulty finding a job or getting promoted. Landlords and insurance companies also look at credit scores when making decisions about leases and policies. While your credit isn't directly affected by your fiancee's, your joint finances and living situation may be affected by your fiancee's credit history.

Options

Because your fiancee's bankruptcy does not appear on your credit report, you may still be able to secure credit on your own. If you and your fiancee marry and decide to buy a house, you may be able to qualify for a mortgage using only your credit and income.

References

• Bankrate; Should Co-signer Pay Bankruptcy Debt?; Justin Harelik; November 2007
• Experian; Credit Advice: Marriage Doesn't Merge Your New Spouse's Bad Credit With Your Good History; Maxine Sweet; March 2006
• MSN Money; Spouse's Bad Credit Creates Mortgage Mess; May 2010
• Experian; Credit Advice: Bankruptcy Remains on Your Credit Report for up to 10 years; Maxine Sweet; August 2010
• St. Louis Bankruptcy Lawyers Blog; How Will Filing Bankruptcy Affect My Co-signer?; January 2011
• Bankruptcy Law Network; Which Bankruptcy Chapter Is Best for a Co-signer?; Kevin Gipson