{"id":1700,"date":"2019-10-08T20:56:28","date_gmt":"2019-10-08T20:56:28","guid":{"rendered":"http:\/\/www.westcoastbk.com\/blog\/?p=1700"},"modified":"2019-10-08T20:56:47","modified_gmt":"2019-10-08T20:56:47","slug":"if-i-file-bankruptcy-will-it-affect-my-spouses-credit-score","status":"publish","type":"post","link":"https:\/\/www.westcoastbk.com\/blog\/2019\/10\/if-i-file-bankruptcy-will-it-affect-my-spouses-credit-score\/","title":{"rendered":"If I File Bankruptcy Will It Affect My Spouses Credit Score?"},"content":{"rendered":"\n

By Ryan C. Wood<\/a><\/p>\n\n\n\n

As with many questions there is a short answer and a long answer.\u00a0 The simplistic short answer is no.\u00a0 If you file bankruptcy it will not affect your spouse\u2019s credit score.\u00a0 When you get married your credit profile is not linked to your spouses.\u00a0 So, no, if you filed bankruptcy in the past it should not negatively affect your new spouse\u2019s credit score.\u00a0 Some believe that when you get married the credit profiles are linked and the credit score is averaged between the two spouses.\u00a0 No, that is not correct.\u00a0 As a bankruptcy attorney<\/a> I get asked this sort of question over and over again.<\/p>\n\n\n\n

The\nLong Answer Is Yes Your Spouses Credit Matters<\/strong>\n<\/p>\n\n\n\n

The long answer is yes\nyour spouse\u2019s good or bad credit will affect your ability to obtain credit or\nloans in the future; generally.  Generally\nwhen a married couple applies for a loan for a home a joint application must be\nfiled and this is when both credit profiles are looked at.  This is not an absolute though.  You are not required to apply for a home loan\nor vehicle loan as a married couple though. \nI have no doubt a mortgage lender or broker would be happy to just use\nthe spouse with the highest credit score to qualify for a home mortgage and\ncharge an interest rate 1 – 3% over the market rate at that time.  If you do apply as a married couple most\nlenders will in fact average or take the lowest middle credit score for spouses\napplying for a home mortgage or other large credit purchase.<\/p>\n\n\n\n

All\nCommunity Assets and Community Income Must Be Listed<\/strong><\/p>\n\n\n\n

If you are married you\ndo not have to file bankruptcy jointly with a spouse.  Here in California as a community property\nstate all community assets and all community income must be listed in the\npetition for bankruptcy protection filed for the filing spouse though.  The community is also getting a discharge of\nthe community debts as well; See Section 524(a)(3) of the Bankruptcy Code.  This is getting very technical and we have other\narticles about this issue\u2026\u2026  Just know\nthat you can file for bankruptcy protection yourself to keep a bankruptcy\nfiling off of your spouse\u2019s credit report. \nBut also know that the long answer above still applies when seeking\ncredit jointly; both credit reports are looked \nreviewed.<\/p>\n\n\n\n

The\nBottom Line Is Take Steps To Rebuild Your Credit<\/strong><\/p>\n\n\n\n

One of the misconceptions us bankruptcy attorneys<\/a> hear all the time is how bankruptcy will hurt or lower a credit score.\u00a0 While having a bankruptcy on a credit report is certainly not positive there are all kinds of entries on a credit report that are not positive.\u00a0 Also for the vast majority of people I meet with the damage to their credit score already took place given all of the missed payments piling up to that point long before seeking bankruptcy protection.\u00a0 When I am sitting down speaking with someone their credit score is already pounded down by what took place already.\u00a0 Most people would be better off credit score wise if they sought bankruptcy protection when they knew payments would be missed or when payments are missed.\u00a0 At the same time I cannot fault anyone for trying to figure it out in the real world.\u00a0 The reality is the filing of bankruptcy actually will improve most people\u2019s credit score by stopping any additional negative history being reported and their debt to income ratio instantly changing to their benefit.\u00a0 There will be no more debt listed on the credit report.\u00a0 After that it is up to each individual to take the necessary steps to increase their credit score.\u00a0 <\/p>\n\n\n\n

Do\nNot Pay Any Companies For Credit Improvement Services<\/strong><\/p>\n\n\n\n

I cannot stand driving\naround and seeing signs stapled to telephone poles advertising how some company\ncan fix your credit for a fee.  I also\nhear radio commercials about removing items from credit reports for a fee.  The Fair Credit Reporting Act governs the\nreporting of credit history and negative history can be on our credit reports\nfor seven years.  If information reported\nto the credit bureaus is not accurate it should be removed and you do not have\nto pay anyone to do this.   <\/p>\n\n\n\n

The\nFederal Trade Commission Website Is A Great Resource<\/strong><\/p>\n\n\n\n

The Federal Trade\nCommission provides a sample letter to dispute inaccurate credit entries and a\nstep by step guide on how to dispute inaccurate credit report entries.  It is simple and easy to do.  We are all also entitled to a free credit\nreport each year from annualcreditreport.com or call 1-877-322-8228.  You can get a report from each of the three\nmajor credit bureaus or just any single bureau. \nThe FTC website also has warnings regarding credit scams and other\nproblems you can learn a lot from.  The Consumer\nFinancial Protection Bureau also has this information and additional warnings\nabout credit scams.  The CFPB was created\nafter the mortgage meltdown to specifically help protect consumers from\npredator lending and other financial problems. <\/p>\n\n\n\n

Not\nHaving Accurate Credit History Is Costly<\/strong><\/p>\n\n\n\n

If your credit score is\nnot a high as it should be because of negative history that is not accurate the\namount you pay in interest on vehicle loans or home loans will be thousands and\nthousands of dollars more.  Over the life\nof a home mortgage of $500,000 at 3.5% interest will result in $308,280 in paid\ninterest.  At an APR of 4.5% the interest\ntotals $412,034; a difference of $103,758. \nRealistically here in the Bay Area there are no homes for $500,000\nanymore.  So let us have more fun with\nnumbers.  A $900,000 mortgage [this is\nassuming you put down 20% at the time of purchase and you are purchasing an\nactual house at around $1.1 million or more] at an APR of 3.5% will have\ninterest totaling $554,905.  At an APR of\n4.5% the interest totals $741,660; a difference of $186,755.           <\/p>\n","protected":false},"excerpt":{"rendered":"

By Ryan C. Wood As with many questions there is a short answer and a long answer.\u00a0 The simplistic short answer is no.\u00a0 If you file bankruptcy it will not affect your spouse\u2019s credit score.\u00a0 When you get married your credit profile is not linked to your spouses.\u00a0 So, no, if you filed bankruptcy in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[345],"tags":[118,346,348],"_links":{"self":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/1700"}],"collection":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/comments?post=1700"}],"version-history":[{"count":2,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/1700\/revisions"}],"predecessor-version":[{"id":1702,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/1700\/revisions\/1702"}],"wp:attachment":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/media?parent=1700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/categories?post=1700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/tags?post=1700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}