||Ask Dr. Don
My husband ruined my credit
Dear Dr. Don,
My husband has filed a Chapter 13 bankruptcy and included our joint
accounts. I did not file, but it is showing up that I filed too.
Will that hurt my credit, and if so, how can I get out of this and
clear my name? Will anybody give me a loan so I can pay these bills
off just in my name?
A joint account means a joint obligation. Your husband had to list
all his debts on his bankruptcy petition. A Chapter 13 bankruptcy
requires the petitioner to come up with a repayment plan to pay
down his debts over a three to five-year period. If he sticks to
the repayment plan, then the bankruptcy court can discharge any
remaining eligible debts at the end of the repayment plan. If your
husband doesn't repay the joint debts under the repayment plan,
however, the creditors can then look to you for payment.
According to page 24 of the U.S. Courts publication,
Basics, "Specifically, after the commencement of a chapter
13 case, unless the bankruptcy court authorizes otherwise, a creditor
may not seek to collect a consumer debt from any individual who
is liable with the debtor." (Please keep in mind that I'm not
a lawyer and this doesn't constitute legal advice.)
Getting a loan in your name to pay off the joint debts
will replace jointly held debt with debt that is held in just your
name. It won't take the bankruptcy information off the joint accounts
on your credit report. It will also change the structure of your
husband's repayment plan, since those debts will no longer be his.
Before shopping for a loan to restructure this
debt, you should speak with his bankruptcy attorney about whether
this is a good idea. You're taking on a burden that you had agreed
to share with your husband. Taking it on yourself may be doing no
one a favor. You can shop personal
loans on Bankrate.
Get a copy of your credit score through one
of the credit bureaus and see how his bankruptcy has affected your
credit. Bankrate's link to myFICO.com
can provide you with your choice of credit reports and scores from
the three major credit bureaus.