Will it Hurt My Spouse’s Credit if I File Bankruptcy in New York City?

One of the first questions we hear from our clients considering bankruptcy in New York City is whether or not their filing will hurt their spouse’s credit.  The short answer is no.  A credit score is unique to an individual and matches a specific name and social security number.  If you are filing an individual bankruptcy petition then your filing will not affect your spouse’s credit.  If a creditor tries to hold your spouse responsible then they can dispute any negative marks on their credit score.

If you file for bankruptcy your spouse cannot be held responsible for any individual debts that were discharged in your case.  However, any debts you share or that your spouse may have co-signed on will still be their responsibility after your bankruptcy is concluded.  So your spouse is not left footing the bill, your attorney may advise a joint bankruptcy filing or perhaps two individual filings as the best way to handle your financial problems.

Sometimes the best solution might be in filing an individual Chapter 13 bankruptcy case rather than a joint Chapter 7 case with your spouse.  In a Chapter 13 your spouse or other co-debtor will also be protected through your “automatic stay” that prevents any collections action against you and them as well.   Chapter 13 is a bit more involved, but it could end up eliminating almost all of your joint debts with only one bankruptcy filing.

It could also be in your best interest to file a Chapter 7 case and have your spouse continue to make the regular monthly payments to the creditor.  The debt will not be eliminated, but if your spouse can continue making regular payments there will be no negative marks on their credit score.  If the debt is with a credit card company your spouse may even be able to continue using the card depending on which company they have the credit card with.  Of course if this is one of the debts that is keeping you underwater then it might be defeat the purpose of your filing bankruptcy in the first place.

If you and your spouse are financially distressed, underwater on your bills and have creditors on your back the best thing to do is to seek the advice of a qualified bankruptcy attorney in New York City.  Too many of our clients will delay seeking the advice they need because they are concerned about how their filing will affect the credit score of their spouse.  Realize there are many ways to protect your spouse’s credit and financial future regardless of your need to file for bankruptcy, even if much of the debt you need to eliminate is shared with your spouse.  Filing for bankruptcy will get you and your family a fresh start and on put you on the road to financial well being.  It’s natural to worry about what could happen to your partner in the bankruptcy process, but waiting can often make things worse for you both.  If you live in New York City and have questions about protecting your spouse in your bankruptcy please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation today.  We only practice bankruptcy law and have a 99% Chapter 7 discharge record in New York City as of 8/31/16.

This article is intended for educational purposes only.  By reading no attorney-client privilege has been created.