If I file bankruptcy, will it hurt my spouse’s (husband’s or wife’s) credit?

No.  Your bankruptcy case is filed under your social security number, so unless your spouse if filing bankruptcy too, it is not going to reflect on his/her credit.

However, it is a little more complicated than that:  In the future if you are applying for credit as a married couple, then the bankruptcy will pull down  your combined credit scores.  Even worse, if you had a joint or co-signed debt, then that account may report a bankruptcy on the non-filing spouse’s credit report, even if that account is kept in good standing.

I often get a situation where the husband has the majority of debt, so the married couple decides that only he will file bankruptcy to keep her credit healthy.  The wife usually only has $5-10,000 in total debt, and they decide to just pay it off over time.  This keeps her credit healthy, but it’s usually a bad idea.  Since the husband is usually the primary bread-winner in Utah, even if her credit is healthy, when she applies for new credit like a home loan or a financed vehicle, his income will be backing the loan, and the bank will run a credit check on him anyway.  Even though they kept her credit healthy, his credit still made the loan come out with a much higher interest rate.  It would have been a better idea to nuke her credit as well, wipe out the extra debt, and both get a fresh start with no debt and joint bad credit.

This is not legal advice.  If you need help go to www.robertspaynelaw.com.


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