Many couples come in to my office to discuss a Chapter 7 Bankruptcy and many times due to employment cut backs, pre-marriage spending, or just bad luck, only one of the parties is in a position where they need to file bankruptcy.
The first question I am always asked, by the non-filing spouse, is whether the bankruptcy will effect their credit. The answer is yes and no. A non-filing spouses credit will not be directly effected. No black marks will show up on the non-filing spouses credit report. However, if both the non-filing and filing spouse apply for a joint car loan, mortgage or otherwise, the bankruptcy can effect the interest rate or borrowing limits that a lender will offer. This is an indirect effect on the non-filing spouses credit.
The next most common question will be what if any information as to the non-filing spouse's income or credit will be required for the filing. The Bankruptcy provisions require information as to the income of both spouses if the non-filing and filing spouse are under the same household. This can effect whether a filing spouse qualifies for a chapter 7. However, the bankruptcy provisions also take into consideration the expenses of the non-filing spouse. This can be a benefit in passing the "means test" in a chapter 7 bankruptcy.
To ensure both spouses are protected in a bankruptcy, regardless of whether one spouse or both file, make sure your attorney is aware up front about the income and credit of both the non-fing and filing spouse. Please call Brandon C. Waltrip if you are considering filing bankruptcy.
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