||Ask Dr. Don
Will bankruptcy affect my
Dear Dr. Don,
I have about $16,000 in credit card debt. We moved
from California to Atlanta. I had a cleaning service for 11 months.
I've only earned $400 since moving to Atlanta. Taking care of my grandson
here has been a hardship for me financially. I am considering bankruptcy.
The credit cards are in my name with extra cards for my husband. My
question is, if I file bankruptcy, will it affect my husband? We rent
now but would like to buy a house in the next six months. Will this
Your situation is further complicated by having moved from a community
property state to a non-community property state. The community
property states are: Arizona, California, Idaho, Louisiana, Nevada,
New Mexico, Texas, Washington, and Wisconsin. You and your spouse
may both be responsible for debts incurred during the marriage while
living in a community property state, and the individual debts of
one spouse may appear on the credit report of the other.
Even in a non-community property state, when you name your spouse
as the authorized user, a creditor who reports the credit history
to a credit bureau must report it in your spouse's name as well
as in your name if the account was opened after June 1, 1977.
This means that regardless of your husband's legal
obligation to repay these debts, your bankruptcy will show up on
his credit report(s). If you file a Chapter 7 (liquidation) bankruptcy
and your husband is responsible for any of these debts, because
they were incurred while you lived in a community property state,
your creditors can look to him for repayment. In that case, a joint
bankruptcy petition is likely to make more sense than you filing
an individual bankruptcy petition.
You need to hire a bankruptcy attorney to advise you. Whether that
attorney should be in California or Georgia depends on which bankruptcy
court has jurisdiction.
According to Auntie Nolo at Nolo.com, "You must file bankruptcy
papers in the judicial district where you have lived for the greater
part of the previous 180 days. If you want to file sooner than that,
you must file in the judicial district from which you moved."
The U.S. Courts Web site provides a map showing the
circuits. The site also has an electronic pamphlet, Bankruptcy
Basics, which is required reading if you're considering bankruptcy.
Your lack of current income and impending credit history after
filing for bankruptcy won't help a joint loan application. Your
husband's ability to qualify for a mortgage will depend on his income
level and credit history. His obligations to repay these debts,
and their effect on his credit history and credit score, will influence
the mortgage rate he is offered on a loan.
-- Posted: Jan. 26, 2004