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Financial impact of marriage after individual bankruptcy

There are many different reasons that couples in Lane County, OR choose to get married—to celebrate love, to start a family and to enjoy financial benefits. That last one might not be very romantic, but it is very real. Married couples often qualify for a lower tax bracket, realize cost savings on insurance and can qualify for a larger home by purchasing it together. That being said, before you take out a loan together it is important to take the financial history of each person into account.

If one person has filed for personal bankruptcy to discharge debt before marriage, he or she likely has a less than desirable credit score which can increase the interest rate you will pay on a joint loan; you may want to wait to purchase an expensive car or a home together. It is also advised that you work together to rebuild the other person’s credit score. You might consider adding your spouse as an authorized user on one of your own credit cards. It is also a good idea for your partner to get his or her own secured card. Each of these things will allow your spouse to repair his or her credit score while at the same time protecting your own personal credit.

With careful spending and planning, you shouldn’t find yourselves with overwhelming debt as a married couple. Unexpected life changes such as unemployment or medical expenses can change that quickly, however. If you do find yourself in need of debt relief after one or both of you has already filed bankruptcy, it is a good idea to speak with an attorney. This will enable you to make an informed decision dependent on your unique financial circumstances.

Source: Fox Business, “Will Fiance's Old Bankruptcy Hurt my Credit?” Justin Harelik, Oct. 16, 2013.

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Eugene, OR 97401

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