Dear Bankruptcy Adviser,
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If I am marrying an individual who declared bankruptcy prior to our marriage, how does that affect my credit and what responsibilities might I incur?
Congratulations on your pending marriage. I wish you the best of luck.
These are fair questions and ones that should concern you. Everyone, even those with good credit, should understand how a married couple's credit is intertwined.
Here's the good news. Your fiancee's credit doesn't directly impact your good credit. Her poor credit won't reduce your credit score. Getting married doesn't mean your credit reports merge and her bad debts become your responsibility. Those debts are hers and only she is liable for them.
Hopefully, she has been cleared of most or all of her debts through the bankruptcy. She might still have some student loans, which couldn't be eliminated, but household cash flow has improved without the other debts in the way.
But here's the bad news. Her credit may impact the interest rate on joint credit applications. In some cases, the prospective lender will not want her on the loan at all. When the lender is willing to have her on the loan, you may be offered a higher interest rate, which means a higher monthly payment.
When she needs to finance something such as a car, you may feel compelled to co-sign for her. While you don't want to think about divorce when you are just getting married, you must remember that you are liable for that debt no matter what happens in your marriage. In fact, the lender will come after you first in the event of a default since you were the reason she got the loan.
I would advise you to not co-sign on a car loan in excess of $5,000 to $7,500. She needs to be able to build credit slowly without a lot of risk to you.
I would also suggest having her build her credit post-bankruptcy with a secured card. And consider putting her as an authorized user on a card you currently have. She can build a positive credit profile within two years of filing bankruptcy, and the sooner she has strong credit, the better.
Take the slow approach to rebuild her credit while still protecting your own. She can have good credit again without jeopardizing your hard work. Good luck!
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